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Dell (Nasdaq: DELL) said Monday it will beef up accounting and corporate governance rules as part of a settlement tied to an investigation into its past financial practices.
Dell, the world's second largest PC maker behind HP (NYSE: HPQ), will also pay US$1.75 million in legal fees, according to a settlement filed with the Securities and Exchange Commission.
Sued by Shareholders
After an SEC investigation into Dell's accounting was made public in 2006, several shareholder groups filed lawsuits saying Dell misrepresented its financial health while officers and board members sold stock at inflated prices.Round Rock, Texas-based Dell restated results for 2003 through 2007 after an internal audit found it overstated sales 
by $359 million and profit by $92 million during those years.
The SEC probe is ongoing.
Under the settlement filed with the SEC, Dell agreed to make sure at least 60 percent of its board members are from outside the company.
Dell also said it would pay for additional training for board members and give directors unfettered access to Dell's employees.
Learning How to Behave
Dell had already implemented some changes as the lawsuit moved through the courts.
Under the settlement the changes must be extended and enforced for four years.
Among them: an accounting code of conduct; enhanced ethics, compliance and insider-trading training; the creation of a global team of accountants to focus on revenue recognition issues; and a provision that lets employees make anonymous complaints about auditing or internal controls.
© 2009 Associated Press. All rights reserved.
© 2009 ECT News Network. All rights reserved.
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