Michael Dell

Dell was hit hard today with a $100 million settlement charge, ultimately putting an end to a five year investigation by the SEC. The U.S. Securities and Exchange Commission has been pouring through Dell’s financial records since 2005 upon allegations of inaccurate accounting and reporting practices.

Michael Dell, the founder and CEO of Dell, will also be facing a hefty fine that will have to come out of his own pocket. Dell, the CEO, will have to fork over $4 million due to the SEC uncovering a commercial, yet mostly hidden, relationship between Dell’s company and Intel.

According to the SEC, Dell has not been entirely honest with its customers with regard to their relationship with some of their hardware providers. Some aspects of Dell’s relationship with Intel should have legally been disclosed to the public, thus the computer industry giant will now face the consequences.

Dell set aside the $100 million in June of 2010 in preparation for finally resolving this dispute. That amount plus Michael Dell’s own $4 million ante closes all disputes regarding their history of faulty accounting, financial reporting, and nondisclosure of their ties to Intel.

Intel Corp. looks to be close to settling with the Federal Trade Commission in the agency’s antitrust accusations against the corporation.  Lawyers for both parties were in front of the commission this morning to file a proposal which asked to suspend proceedings until July 23 until the commissioners were able to fully review the proposed agreement.

If the commission does not accept the proposal, there will be a trial in September with a FTC judge to hear testimony on the details of business procedures between Intel and their chip customers.  The FTC complaint was filed in December and accuses Intel of using illegal tactics to force some of the major computer manufacturers to use their microprocessor chips.  The complaint also alleges that Intel used tactics to illegally stop competition in the graphics chips used in PCs.

Intel has denied all the accusations so far, just as it has in the past when several countries in Europe as well as South Korea and Japan filed antitrust suits against the corporation.  Intel claims that the rebates that rewarded exclusive deals with customers were simply price discounts and perfectly acceptable practice.

The FTC, on the other hand, says that Intel has abused its market position.  The agency wants the company to follow their terms and license their chip technology to other companies.  Intel refused to give in to these demands at the time that proceedings were begun.

In past suits, Intel has faced some hefty penalties including a settlement with AMD that included a $1.25 billion payment from Intel to AMD.  That was a result of an antitrust suit that AMD had brought against the larger company back in 2005.  Last year, the European Union ordered Intel to pay a $1.45 billion fine after deciding that Intel had engaged in anti-competitive practices in Europe.