Dell $40 Million payout protects executives
By Shalini Singh

Computer giant Dell has done particularly well in India with a 17% increase in sales in the last quarter. Dell is now No. 2 in India. Its international revenues during the third quarter were a whopping $12.9 billion.  Dell has now paid $40 million to quietly settle allegations that some its executives mislead the market.

In 2006,  some Dell shareholders filed a court case alleging that ‘Dell’s own executives, including Michael Dell and Kevin Rollins, tried to personally capitalize on their own company’s downturn by propping up their corporate reports, including to the SEC, with false information. This led to a rise in stock value, enabling them to sell off tremendous amounts of their shares prior to the release of any bad news, which the company put off as long as possible. Many executives, the suit details, sold off between 90% and 100% of their personal stock holdings, with Rollins allegedly selling 98.6% of his personal holdings in Dell Computer – figures such as this were not attributed and have not been verified.’.

While mainstream media have yet to report this, Footnoted.org has just broken the story how mysteriously Dell has now decided to settle the matter by paying $40 million to these shareholders to stop the litigation

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On November 20, 2009, the parties to the appeal entered into a written settlement agreement whereby Dell would pay $40 million to the proposed class and the plaintiff would dismiss the pending litigation.
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Makes you wonder on why any computer company would pay $40 million to stop the case instead of doing all it can to defend the reputation of some senior executives?

And using classic media management practices, Dell released this information to the American Government on Friday when most of the media are preparing for the weekend. The details were filed with the SEC but not released to the media and the general public.