Forgot your password?
typodupeerror
Government The Courts The Almighty Buck

Judge Approves $100 Million Dell Settlement 72

Posted by samzenpus
from the pay-up dept.
crimeandpunishment writes "It's official. Dell will pay the US government $100 million to settle fraud charges. CEO Michael Dell will personally pay a $4 million fine. A federal judge approved the settlement after Michael Dell assured him the company will deliver on the reforms it promised. Dell was accused of pumping up its profits over five years by improperly using payments from Intel, in order to meet Wall Street targets."
This discussion has been archived. No new comments can be posted.

Judge Approves $100 Million Dell Settlement

Comments Filter:
  • There was a time when your name was synonymous with inexpensive but decent computers. However, the last truly decent computers you released were the Dell Mini 9/10v...you're just not the Dell I used to know. Your monitors still kick quite a lot of ass, but your computers are more or less worthless at this point.

    "Dude, you're getting a Dell." "Crap."

    • That's what happens when you race to the bottom while maintaining appearances with off the books income. It's also very hard to compete with a company subsidized to the extent Dell was.

    • Re: (Score:1, Insightful)

      by Anonymous Coward

      Many PC assemblers/distributors don't have much of a choice these days. Unless you're buying very, very high-end hardware, it's damn near impossible to get any decent-quality computer hardware that's manufactured in the US or Europe.

      Most consumer-grade computer hardware comes from Asia these days, and even then it's not from the more capable nations like Japan, South Korea or Taiwan.

      Even the largest assemblers/distributors are stuck buying what's essentially "dollar store" electronics. Of course, this ends

    • I have a long history of Dell hatred, but I will say that my 2707WFP monitor works extremely well and has a build quality that beats most things I've seen from Apple recently. Dell, like many large companies, is a sort of Jekyll and Hyde beast where some parts are evil/crappy/incompetent, while other parts are actually pretty good. The problem is that the negatives usually outweigh the positives in the public opinion. Case in point: Here at the office we just ordered a bunch of HP's to replace the 7+ year

      • by Pojut (1027544)

        Agreed about the monitor thing (which I included in my OP.) Their monitors have long been a standard in the consumer space...it's difficult to beat their quality vs. price.

        • by jhoegl (638955)
          You mean their Rebranded monitors, correct?

          Fact is, the only thing that is good about Dell is not put together by them.
      • Re: (Score:3, Interesting)

        by compro01 (777531)

        The reason why Dell's monitors are good is because they aren't made by Dell. Your monitor was actually made by Samsung. They also rebrand BenQ and LG monitors.

      • by drsmithy (35869)

        I have a long history of Dell hatred, but I will say that my 2707WFP monitor works extremely well and has a build quality that beats most things I've seen from Apple recently. Dell, like many large companies, is a sort of Jekyll and Hyde beast where some parts are evil/crappy/incompetent, while other parts are actually pretty good.

        As with most things, it's usually a simple matter of getting what you pay for.

        Buy some bottom-end, crap machine like an Inspiron ? Likely it's going to give you trouble. Spe

    • by chrb (1083577)

      There was a time when your name was synonymous with inexpensive but decent computers.

      Do you have any evidence that this isn't still the case, personal experiences aside? I've worked in several large enterprises, with thousands of desktops, that standardised on Dell hardware. Dell was cheaper than the competition and the problems were no greater than their competitor brands (HP, Acer, Lenovo, Toshiba). Plus Dell is so ubiquitous that hardware and driver problems are usually already solved by someone, somewhere in the world. I doubt that Dell has any huge QA problem when compared to HP/Acer/L

  • by Anonymous Coward

    Dell>>>>>HP
    Period

    • by jhoegl (638955)
      THe internet laughs at you.

      At all of the companies I have worked for, i came into a Dell shop and converted them. How do you ask?
      TCO... The total cost of ownership of one downed system costs ~$300/each, and when Dell has a trackrecord of failing systems it quickly adds up.
      TCO includes IT time in swap/repair and lost productivity (20 minutes adds up when the user is a hard worker).
      So enjoy your Dell, you will be working hard to keep them up and running.
  • by Pikoro (844299) <init@iAUDENnit.sh minus poet> on Thursday October 14, 2010 @08:07AM (#33891964) Homepage Journal
    What I want to know is why is the government the one that always gets these settlements? Why not refund it back to the consumers or use it to subsidize the next year of computers that they ship out?

    I know it's a fine, but still, in the end, it's always the consumers that lose.
    • by Anonymous Coward on Thursday October 14, 2010 @08:18AM (#33892034)
      They were charged with fraud for improperly making their company look like it was in better health than it really was. The people "harmed" were the investors. If you want to give it to the people impacted almost all of it will go to large institutional investors who held on to their stocks thinking that the company was hitting its targets. Very few consumers would see a nickel of that money. Besides this is a slap on the wrist for Dell. Their bigger impact has been on their "reputation," but this little episode will be completely forgotten the next time the hit their targets and greed takes over. Business as usual....
    • Because Dell had huge supplier contracts with the government.
  • Payments from Intel? (Score:4, Interesting)

    by rbarreira (836272) on Thursday October 14, 2010 @08:12AM (#33891990) Homepage

    Might those "payments from Intel" be related to Intel's attempts to keep AMD CPUs out of the market place as much as possible?

    • by Magada (741361)

      They might. Of course, the anti-trust inquiry won't happen.

  • by Anonymous Coward

    That is all? Man, it's good to be rich in the US. A regular person caught cooking the books would probably go to jail. Michael Dell gets to pay $4 mil and walk. No penalties whatsoever for his accomplices, either.

  • by Anonymous Coward

    I can only imagine that this would still be cheap for Dell at twice the price.

  • by schwit1 (797399) on Thursday October 14, 2010 @08:24AM (#33892060)

    Why no jail time? It was a multi-million dollar fraud to bilk consumers and stockholders out of millions. How is this any different than blatant theft.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Why no jail time? It was a multi-million dollar fraud to bilk consumers and stockholders out of millions. How is this any different than blatant theft.

      Jail is for pot smokers, not corporate executives.

    • When I "steal" digital music (and get caught) I too must pay a hefty fine... with no jail time. Why should Dell be treated differently?
      • Maybe because there's a difference between stealing a 99 cent song that you wouldn't have bought anyway vs. defrauding millions of people out of billions of dollars?
    • by hodet (620484) on Thursday October 14, 2010 @08:49AM (#33892196)
      Because it was only fraud, you make it sound like he downloaded a album off piratebay.
      • Because it was only fraud, you make it sound like he downloaded a album off piratebay.

        Post ... Of ... The ... Week

      • by sootman (158191)

        According to Forbes he's worth 14.5 billion--number 37 on their list of the world's billionaires [forbes.com] and the 15th richest person in the United States. [forbes.com] (Think about that for a second: there are only FOURTEEEN PEOPLE IN THE UNITED STATES RIGHT NOW WITH MORE MONEY THAN MICHAEL DELL.)

        Let's do some math, shall we? He has $14,500,000,000 and he has to pay a $4,000,000 fine. Let's knock six zeroes off each of those. He has to pay $4 for for every $14,500 he has. That's 4/14500 or 1/3625 of his net wealth. Let's just p

    • Standards of proof are higher in criminal cases. If the government thought they could present a strong criminal case, they would have.
  • Just from intel? (Score:1, Interesting)

    by Anonymous Coward
    Maybe the judge cares about the middle class and when he saw that in order to save up this possibility, Dell had frozen all raises and bonuses that people had been promised?

    Oh, I have to redact that - i'm lower class... work for them... and make around 40k a year, and have probably talked to a couple of you.
    • Re: (Score:3, Insightful)

      by GameboyRMH (1153867)

      You make 40k a year and you're "lower class?" OK I see five possibilities here:

      1. You're talking rupees while I'm thinking US dollars
      2. You're working towards being a mascot for the Republicans in the next presidential election a la Joe the Plumber, so once you're making over $250k a year you'll be "middle class"
      3. You have way too many kids and a stay-at-home wife
      4. You do more cocaine than Dr. Rockso
      5. You're so bad at managing money you make MC Hammer look good - maybe you own a boat or small aircraft.

  • Shows how much bad thinking is left in Wall Street... when one of history’s most successful computer retailers thinks it’s better to artificially “pump up” its stock prices, rather than increasing its true overall value through better products and better customer service. And as Pikoro noted above, the settlement funds should go towards programs which provide or promote technology for the public good (i.e. pumping up Kno/iPad tablet availability for schools to replace textbooks, or funding a practical, decent, open school admin database), and not going directly into mysterious government coffers where people like defense contractors can get at it, which is doing nothing but *harming* the public good.
    • Re: (Score:3, Insightful)

      by Ihmhi (1206036)

      This bad thinking is endemic in our short-term society.

      For example, let's say you ran a business printing t-shirts. For an expense you can get a brand new shirt printer that will make your shirts look better than the competitions as well as cost less to print. The downside is that they are pricey enough where you would show a loss this quarter. Would you take this deal? You'd give up short-term profits on the books, but ultimately you'd get greater profits in the long run.

      There's this culture of growth grow

      • by jefe7777 (411081) on Thursday October 14, 2010 @11:59AM (#33895462) Journal

        The culture of growth used to be also a culture of contraction, due to a natural cycle. There was balance. Periods of expansion and contraction. People were responsible, bought only what they needed, saved like a squirrel during the good times, in preparation for the lean times.

        Now this country is built on living the lifestyle you want NOW, by financing it on your future labor & productivity. And very few squirrel away during the good times, in preparation for the lean times.

        People can adjust to contractions. But not if they're loaded up with bills and debt. If you're renting a big apartment, you move to a small apartment. If your paid-for-car costs too much to drive, you take public transportation, ride a bike, walk, or buy a used scooter. If you're commute is 100 miles, you get a different job, you move closer to your existing job. If you lose your job, you use your rainy day fund.

        In the last several decades, contractions are increasingly viewed as absolutely negative, and at the first sign of a small contraction, central planners manipulate people so that the small contraction is prevented. This is done over and over, till the strategy fails, and nature gets her way eventually, and we see a huge contraction, that would test even the most responsible people, and for those who are severely leveraged out (just look at debt to income ratio), they have zero chance of adjusting. This is analogous to putting out every small fire in forests. Then one day, the whole thing goes up in a jaw dropping inferno. The natural cycle of expansion/contraction clears out bad businesses, bad debts, reminds people to be responsible on a regular basis with minimal blood on the street, and prevents expansion for expansion's sake. The side effects of a debt based society that embraces central planning, and the idea that we can expand forever, till the music stops, and people scramble for a chair ...it is unsustainable. We're watching it in action, right here right now. This ain't a Republican thing, this ain't a Democrat thing. It's an "us" thing. The leadership of both parties have grandiose plans that are not sustainable. And the sheeple follow along as if it's only one party or the other that is insane... when the reality is, both parties are insane, and they are perfect mirror of their constituents... ...sorry for my long post with the slide into politics ..it's a bad habit. But money, economics, politics, etc are all inseparable....

        • by Ihmhi (1206036)

          That was an excellent post that described my thoughts better than I did! Thanks for articulating my general point so wonderfully.

  • Personally? (Score:3, Insightful)

    by hibernia (35746) on Thursday October 14, 2010 @08:58AM (#33892286) Homepage

    CEO Michael Dell will personally pay a $4 million fine

    So, does personally, really mean personally, or is he going to get reimbursed the $4 million as a "business expense"?

    • Re:Personally? (Score:4, Insightful)

      by Chowderbags (847952) on Thursday October 14, 2010 @09:58AM (#33893050)
      Michael Dell's net worth is 14 billion dollars. Fining him 4 million dollars isn't even a slap on the wrist, it's a joke. Fine him a few billion dollars and he might get a message.
    • by alexo (9335)

      CEO Michael Dell will personally pay a $4 million fine

      So, does personally, really mean personally, or is he going to get reimbursed the $4 million as a "business expense"?

      Does it matter? A $4M fine for him is something like a $100 fine for me.

  • the new Gateway 2000

    http://en.wikipedia.org/wiki/Gateway,_Inc [wikipedia.org].

    when you ruin your name, everything else goes down the toilet. electronics is such a cutthroat competitive environment, you can't ever play the game of ruining what people associate your brand name with

    because there's also this:

    http://arstechnica.com/business/news/2010/06/suit-alleges-that-dell-shipped-12-million-faulty-computers.ars [arstechnica.com]

    bye bye dell

  • CEO Michael Dell will personally pay a $4 million fine.

    I think his first question was, "Do you take a personal check, or do I have to use my AmEx?"

    Seriously, a 4 million fine for someone like Michael Dell is nothing.

    • Assuming he keeps all $12 billion of his money in a 1% interest-bearing checking account, $4 million amounts to about two weeks of interest.

      And I assume he earns quite a bit more than 1% on his wealth.

      • According to SEC filings, Michael Dell owns 226,383,088 shares of Dell (worth about $3.6B). Dell is up 14 cents so far today (probably a result of the settlement news), which means that even after the fine he is up $27 million today.
  • What about SOX??? (Score:3, Interesting)

    by danwiz (538108) on Thursday October 14, 2010 @01:15PM (#33896928)

    Wasn't SOX (also know as the 'Corporate and Auditing Accountability and Responsibility Act') supposed to prevent such financial accounting fraud?

    Sarbanes–Oxley Section 802: Criminal penalties for violation of SOX [wikipedia.org]

    Whoever knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States or any case filed under title 11, or in relation to or contemplation of any such matter or case, shall be fined under this title, imprisoned not more than 20 years, or both.

  • by mahadiga (1346169)

    Earn billions illegally or immorally.
    Pay 30% as Tax to Govt.
    Pay 20% as Party Fund to Republicans or Democrats.
    Govt will bail you for your shady activities.

Prediction is very difficult, especially of the future. - Niels Bohr

Working...