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Michael Dell's computer firm gets off rather lightly with a $100m penalty to settle accusations of fraudulent accounting
THE spell has been broken. For years, Dells seemingly magical power to squeeze efficiencies out of its supply chain and drive down costs made it a darling of the financial markets. Now it appears that the magic was at least partly the result of a huge financial illusion. On July 22nd Dell agreed to pay a $100m penalty to settle allegations by Americas Securities and Exchange Commission (SEC) that, in the SECs words, the company had manipulated its accounting over an extended period to project financial results that the company wished it had achieved. The company neither admitted nor denied guilt as part of the settlementa common phraseology in such deals.
The penalty seems rather light given the gravity of the SECs accusations. According to the commission, Dell would have missed analysts earnings expectations in every quarter between 2002 and 2006...