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Dell takes $100 mn charge for SEC Deal

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CIOL Bureau
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SAN FRANSICO, USA: Dell Inc said on Thursday it is in talks to settle a U.S. Securities and Exchange Commission investigation into its accounting practices and its relationship with chipmaker Intel Corp, and said it has established a $100 million reserve for a potential settlement.

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Shares of Dell slid more than 2 percent in extended trading, as the company revised its first-quarter results downward to reflect the charge.

The resolution of the SEC probe would involve a civil injunctive action against the computer maker for alleged violations of federal antifraud provisions related to its accounting, as well as negligence-based fraud charges related to its relationship with Intel.

Dell also said Chief Executive Michael Dell is speaking with SEC staff about settling allegations against him that involve Intel.

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A company spokesman declined to provide additional details on the matter as it related to Intel. The company said any settlement would be made without admitting or denying the SEC's allegations.

A settlement by the CEO would not include any bar against his service as an officer and director, the company said.

"We are hopeful that these settlement discussions will achieve a comprehensive resolution in the near future," said Sam Nunn, presiding director of Dell's board, in a press release.

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"The independent directors of the board have affirmed that Michael Dell will continue to lead the company as its chairman and CEO, and he continues to have our complete confidence and support."

As a result of the $100 million charge, Dell said it has revised first-quarter results, reducing earnings per share by 5 cents.

The SEC probe into the accounting matters began in 2005. Dell later acknowledged accounting errors and restated financial results from 2003-2007.

Shares of Round Rock, Texas-based Dell closed at $13.07 on the Nasdaq, and fell to $12.79 in extended trading.

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