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Federal Prosecutors Launch Probe of Dell 94

Posted by Hemos from the continuation-really dept.
An anonymous reader writes, "The U.S. Attorney for the Southern District of New York has launched an investigation into Dell's finances and has subpoenaed company documents going back to 2002. Dell execs had previously said they didn't think any of this would add up to any material impact, but that seems to be a possibility now." More accurately, this is a continuation of an ongoing "informal" SEC probe. That probe has caused Dell to delay its financial reporting and raised the possibility of needing to restate previous quarters' earnings.
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Federal Prosecutors Launch Probe of Dell More

Federal Prosecutors Launch Probe of Dell

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  • Ha HA (Score:1, Funny)

    by slashdotet ( 992348 )
    Ahh Dell can't help but laught at there troubles!

  • Close up shop (Score:4, Funny)

    by shawngarringer ( 906569 ) on Monday September 11, 2006 @10:19AM (#16080691)
    Dell should close up shop and return the money to the shareholders!
    • Dell should close up shop and return the money to the shareholders!

      Your kidding right? Since when does a "tech" company return profits to the shareholders?

      More typical is they carry the earnings internal until bad news happens and take giant write downs to compensate. In the mean time, those invested in them are playing chicken to see who can get top dollar before it colapses. There are exceptions, but not many.

      • Re:Close up shop (Score:4, Informative)

        by eshefer ( 12336 ) on Monday September 11, 2006 @10:54AM (#16080949) Homepage Journal
        it's a referance to michel dell remarks from 1997 to the question a reporter asked him: "what should apple do?" his answer was "apple should close up shop and return the money to the shareholders".

        • Re: (Score:2)

          by dfghjk ( 711126 )
          Dell was asked what HE would do if HE were CEO of Apple and he said that HE would shut down Apple and return the money to the shareholders. Of course he would. He also said that he would never accept that job---acknowledging that he would not be a good fit for that style of company. Dell has also said that Apple's future looks like SGI's and he hasn't been proven wrong. If Apple hadn't shifted its focus toward digital entertainment it may well have gone out of business.

          Michael Dell is all about ROIC. F

          • Re: (Score:2)

            by eshefer ( 12336 )
            "Dell has also said that Apple's future looks like SGI's and he hasn't been proven wrong."

            LOL!

            "If Apple hadn't shifted its focus toward digital entertainment it may well have gone out of business"

            ROLFLMAO.

            "Michael Dell is all about ROIC. For those that don't know, think of ROIC is the interest rate paid on your savings account. Dell maximizes earnings and minimizes capital investment. Clearly Apple doesn't work that way. Low volumes, high margins, unique aesthetics and boutique sales are relatively capital-

            • Re: (Score:2)

              by dfghjk ( 711126 )
              "OK, you should REALLY check out dell's latest stategies over the last few years. I have two words for you:
              Alianware, XPS, ditty, DJ."

              Alienware is a surprise. Dell basically doesn't buy other companies.
              XPS is a very old brand. It's simply the top Dimension machine and is successful.
              The music players aren't a surprise coming from Dell. They spent no development money on it.

              Can you count?

              "Do you want to know what I think?
              here it is:
              "Dell's future looks like SGI's" "

              Didn't know that was the original topic,

              • Re: (Score:2)

                by eshefer ( 12336 )
                "Alienware is a surprise. Dell basically doesn't buy other companies."

                yup. it's an anomilly. Do you have an explanation?

                "The music players aren't a surprise coming from Dell. They spent no development money on it."

                True. but that was folow up to apple's ipod success. they failed dissmally there. it was dell trying to test the waters in a new market, far from anything thier brand is associated with. that initiative crashed and burned.

                "Dell is the largest supplier of PC's worldwide"

                Not for long, come back two

                • Re: (Score:2)

                  by dfghjk ( 711126 )
                  "Do you have an explanation?"

                  I don't know, but it occurred after MD stepped down. It occurred during Rollins time and I know MD was against such acquisitions.

                  "Not for long, come back two years from now, we'll see. take a look at PC growth rates now, take a look what companies are beating the PC growth rate. this should give you a clue."

                  Doesn't matter, what I said was correct. This was a discussion about the man, not the company, and MD no longer runs Dell.

                  "can you?"

                  Yes, I can. There were more than "two w

                  • Re: (Score:2)

                    by eshefer ( 12336 )
                    "I simply responded to the mischaractization of the Michael Dell quote from 9 years ago."

                    OK, point taken. Anyway, it was FUD, and has been proven to be wrong.

                    "Today, macs are really Intel PC's running a polished NextStep and the rest is consumer electronics. Quite a huge transformation."

                    Actually, nine years ago - that was the original reason Apple bought Next (transition to the new OS and the platform change to intel). it just took 8 years longer then Gil Amellio was promissed by steve jobs). As for Consume

                    • Re: (Score:2)

                      by dfghjk ( 711126 )
                      "Anyway, it was FUD, and has been proven to be wrong."

                      It wasn't FUD nor proven to be wrong. FUD is a technique of misinformation meant to harm a competitor. MD was pressed by a journalist to comment on another business that he didn't consider a competitor and he never predicted Apple's demise. He himself said that he would not be a good candidate for the job.

                      "Fighting over the comodity PC sales in this day and age is like fighting over Minicomputer sales in the begining of the 80s."

                      Only if you believe th

                    • Re: (Score:2)

                      by eshefer ( 12336 )
                      "It wasn't FUD nor proven to be wrong"

                      Ah, ok. right. what was it then? he could have just said "I'm not going to answer that question. I don't care" - his answer stated that he sees no future in apple.

                      "Only if you believe that PCs are destined to disappear from the market (which I'm thinking you do). PCs aren't disappearing"

                      sales of desktops (which are what I meant) are stagnating, while sales of notebooks and other closed systems (like the imac and mac mini) are rising. I don't know if they are going to di

                    • Re: (Score:2)

                      by dfghjk ( 711126 )
                      "Ah, ok. right. what was it then? he could have just said "I'm not going to answer that question. I don't care" - his answer stated that he sees no future in apple."

                      He did not say that. First off, it was an interview of MD and had nothing to do with Apple, yet the journalist decided to ask MD what he'd do if he was taking over Apple as Jobs was. His initial reaction was that he wouldn't take that job. When pressed for an answer, he said he'd liquidate the company.

                      That should surprise no one who understand

                    • Re: (Score:2)

                      by eshefer ( 12336 )
                      "I can't help that you aren't able to think objectively. It's your problem, not mine"

                      OK. good day, sir.
            • "If Apple hadn't shifted its focus toward digital entertainment it may well have gone out of business"

              ROLFLMAO.

              Someone clearly doesn't remember 1997 very well.
          • Dell sells crap PCs to idiots who don't know any better. They're like eMachines, or Gateway, or HP, or Compaq, or Levino... or any other brand. Tell me whats different about any of the bargan-basement PC brands?

            Apple and Dell are very different companies. Apple pays R&D teams to innovate, where as Dell just copies. Same with all the other beige box PC companies. Apple develops something new, packages it up so its easy to use, secure, stable, and fun. And they sell tons of machines, make a huge p

            • This is conclusion is incomplete and incompetent. Dell has distinct target markets , and provides the proper IT solutions for each customer. Dell has been highly successful in recognizing their different customer needs, and tailoring their marketing accordingly. Home & Home Office Small Business Medium & Large Business Government, Education & Healthcare To compare the Apple and PC hardware and software is just dumb, not to mention lame. The broadly targeted and customer oriented Dell business m
              • Why would Apple want to be mainstream? Isn't enough to be successful and profitable? Last time I checked Apple has several million (it was maybe over 100?) in the bank. They're not losing money. Thats what I'd call a successful business.


    • Why? aren't they profitable?

      I know most companies are having maintenance contracts with Dell, in which Dell is excellent and very fast. Dell isn't focussing on the consumermarket, but is doing quite well with businesses.

      Walk into any company (government, educational and private) and you'll find Dells...

      • I agree, if you are a corporate client on a support plan, support is quick and painless. I work in an almost pure Dell hardware environment, I have had new hard drives to my door in less than 3hrs, and when ever any of my laptops has a problem they dispatch both a tech and parts to fix the problem.

        And no, none of my laptops have caught fire.. The recalled batteries where replaced within 5 business days, which I believe is fast considering the size of the recall.
      • I agree with you. Here at my college they have two Sun Labs just for the Engeneering Department, one half apple half dell lab for the Arts Departments. Then every other lab on campus is Dell. I'd say a good 1000 more dells plus there is the other secondary campus that has one lab of 200 dells. Plus all the teachers computers are dells, and they just have images for every set of hardware plus they update every lab after 3 years and they buy all the computers not just lease them. So they format the computers
  • I used to handle OEMs for a large monitor supplier, and Dell was the worst buyer on the entire list. Dell can hollow out a supplier like no other company I've seen before or since.

    Goes around...comes around, eh, Michael...?

    • Re: (Score:3, Funny)

      by johneee ( 626549 )
      You've obviously never dealt with Wal*Mart have you?
      • Dell and Wal*Mart are actually not too far off. Neither one is a 'true' monopoly in all the markets they are in... but in certain select markets (Wal*Mart in rural areas, Dell in the U.S.), they are near monopolies, controlling a significant percentage of the market. Dell had 30% of the market in April, compared to HP's 18% and Apple's 3.5% according to this article [com.com].

        When you command nearly a third of the market for PCs, you can make your suppliers do almost anything -- including making them sell components
        • When you command nearly a third of the market for PCs, you can make your suppliers do almost anything -- including making them sell components to you below-cost, just so they won't lose your business.

          ... Why wouldn't these suppliers want to lose business that was causing them a loss?

          • Re: (Score:2)

            by johneee ( 626549 )
            I can't really speak for Dell, but the usual way of doing it is this:

            1: go to manufacturer and negotiate reasonable prices for lots and lots of stuff
            2(a): wait until the manufacturer ramps up the workforce/leases on equipment and space to meet your order and has a significant portion of their income tied to your continued patronage
            3(b): Tell them that they're going to lose your orders unless they reduce the price of their products and refuse to pay more when costs go up. Since such a huge part of their inc

  • obligatory... (Score:5, Funny)

    by jimfinity ( 849860 ) on Monday September 11, 2006 @10:25AM (#16080730)
    dude, you're getting a subpoena
    • Dude, your getting a probe!

  • Dude! (Score:5, Funny)

    by Jaysyn ( 203771 ) on Monday September 11, 2006 @10:25AM (#16080732) Homepage Journal
    .. you're getting a cell?

    Jaysyn
  • I think Eliot Spitzer needs a new hobby.

  • You know they're guilty when they say .... (Score:3, Funny)

    by Silver Sloth ( 770927 ) on Monday September 11, 2006 @10:26AM (#16080740)
    From TFA
    "We are fully cooperating with the investigations and working to resolve any and all issues raised in connection with those investigations as quickly as possible, and we will take any appropriate remedial or corrective actions to address any problems," said a statement from Chairman Michael Dell.

  • Not suprising... (Score:5, Interesting)

    by fredistheking ( 464407 ) on Monday September 11, 2006 @10:28AM (#16080751)
    Dell had a tendency to dump computers at the end of every quarter to inflate volume. This went on for over 2 years up until a few months ago. I know a few people who made lots of money by buying these machines, sitting on them for a month and then ebaying them once the prices on Dell home went back to normal. The whole time this was happening I never could figure out how Dell was actually making money on these systems when they were dumping them for 25%-30% less than normal price. I figured this 25% - 30% was their margin but it looks like that might not have been true.
    • Channel stuffing is only one of Dell's tricks to make your quarterly numbers.
      • Channel stuffing is only one of Dell's tricks to make your quarterly numbers. Dell doesn't utilize 'channel sales' - it's a direct sales only manufacturer and in some instances acts as a channel for other mfr's. It isn't channgel stuffing if theres' no channel - it's just plain old dumping.
        • No. Dell sells through integrators, VARs, minority owned businesses, some resellers and many other "partners" as well as direct. Many of the largest players in the business sell Dell.

    • Re: (Score:2, Informative)

      by CaptainAx ( 606247 )
      Usually with these 25% to 30% off systems, there were rebates that wouldn't be issued for months...

  • always copying (Score:4, Funny)

    by gEvil (beta) ( 945888 ) on Monday September 11, 2006 @10:29AM (#16080752)
    That probe has caused Dell to delay its financial reporting and raised the possibility of needing to restate previous quarters' earnings.

    There they go, copying Apple again...
  • I will be surprised if anything comes of this. If there is missing money it hasnt gone to shareholders, wth the dropping of the pda line, mp3 players and other "extras" it hasnt gone into product development, and we all know it certainly hasnt gone into customer service. Dell had a good thing going for quite a while, I used to recommend NO ONE but them, but for the past few years I tend to recommend ANYONE but them.

    • I will be surprised if anything comes of this. If there is missing money it hasnt gone to shareholders, wth the dropping of the pda line, mp3 players and other "extras" it hasnt gone into product development, and we all know it certainly hasnt gone into customer service...

      "Missing money" doesn't mean that the money was there to begin with. Just that they (if true) have misstated their income in some way. Why would a company do this? Numerous reasons: to prop up the share price... the top brass might have

  • I wonder how confortable Dell employees feel about their retirement plans? There is no shortage of companies who have recently bricked the value of the company plans and left thousands of people high and dry.

    I'd be considering ways to move the value of my retirement plan somewhere else.
  • I wanta know why half the Dells in our office keep reporting that they are pirated when they are original Dell installations. YAY :)
    • Maybe cos they've all got sticky labels on with product keys, and people have copied them onto paper and taken them home to use.
  • ...in the long run. With the share buybacks suspended because of the investigations when that suspension is lifted the negatie news might have caused the share prices to have decreased making them cheaper for Dell to buy back and thus increasing the profit they can make when they sell them again years from now.
    • Except companies almost never sell stock directly to the public. They might issue options to employees, or even stock to executives, but by and large companies don't finance their operations that way. They generally use bonds to cover their debts.

  • "An Anonymous Reader"? (Score:4, Funny)

    by ben there... ( 946946 ) on Monday September 11, 2006 @11:03AM (#16081011) Journal
    An anonymous reader writes,

    Oh, hey, Mr. Jobs!

    I didn't know you read slashdot!

  • Press Coverage Bias Detector (Score:5, Insightful)

    by wmduncan ( 888561 ) on Monday September 11, 2006 @11:10AM (#16081084)
    This should pose an interesting comparison of how Dell is treated by the press vis a vis Apple.

    To be "fair and balanced", the next articles should say that "beleagured" Dell faces delisting
    by the Nasdaq and that Michael Dell faces SEC charges.
    • Apple hasn't generally been referred to as "beleaguered" by the main-stream press in a decade. There are still those who try and predict Apple's death (51 times since 1995 - http://www.macobserver.com/appledeathknell/index.s html [macobserver.com]) but they have always been hilariously wrong.

      Apple is having it's own financial reporting issues of late, and these have been widely covered in the media.

  • Are There Any Honest Companies Left? (Score:5, Interesting)

    by Anonymous Coward on Monday September 11, 2006 @11:12AM (#16081100)
    I'm in the market for a large wide screen LCD monitor. Who should I buy from?

    Sony makes a lovely 23 incher. They also distribute a wonderfull rootkit.
    HP has a nice 24 inch LCD. They also have an ethically challenged Board of Directors.
    Dell's 24 inch wide screen LCD gets rave reviews. They seem to have some financial reporting issues.

    How can I "vote with my dollars" when there is no one to vote for?
    • BENQ?

    • Re: (Score:1)

      by Moofie ( 22272 )
      You don't seriously think those are your only options for 23" LCDs, do you?
    • This is off topic but every Samsung LCD I've ever used has been amazing. Expensive, but great.
    • Go with Samsung, they have a no-dead-pixel LCD policy last time I checked...(Not sure if it applies to all LCDs or certain models. ~CYD

    • How about a 24" iMac? [apple.com] ... of course that is a bit more than just an LCD monitor...

      I do not work for Apple nor do I own one... yet...
      these puppies are pretty sweet though, and my Dell Laptop sucks ass

    • Re:Are There Any Honest Companies Left? (Score:4, Funny)

      by Alchemar ( 720449 ) on Monday September 11, 2006 @01:18PM (#16082184)
      What do you do for the presidential election? Same issue, same resolution.

      • Re: (Score:2)

        by TFloore ( 27278 )
        What do you do for the presidential election? Same issue, same resolution.

        Hold your nose, and vote for the third-party fruitcake. Almost by definition, most 3rd-party candidates in the USA are fruitcakes. They have one issue they make some sense on, and most everything else they are well-characterized as a fruitcake. But you aren't voting to get them elected, you are voting to contribute to the "51/34/26% of votes cast go to neither of the major party candidates" (whatever percentage you want, as 1% more th

    • Re: (Score:2, Informative)

      by gatesvp ( 957062 )
      Try BenQ, Samsung and (I believe) NEC.

      Plus Apple just came out with a 24" iMac. It costs twice as much, but it comes complete with a computer, all for the same size :)

    • Re: (Score:2, Informative)

      by DittoBox ( 978894 )
      Samsung? Most of the panels you buy are from them anyway.

      http://www.newegg.com/Product/Product.asp?Item=N82 E16824001222 [newegg.com]
      http://www.newegg.com/Product/Product.asp?Item=N82 E16824001223 [newegg.com]
    • Sony is a big company. Their content and entertainment divions may be on my sh*t list right now, but they have always (and still do) make darn good electronics hardware, when it isn't crippled by the other divisions.

      Since their TVs support all the correct standards, I'd give them a carrot in this case and support them. I won't touch anything else Sony makes right now, but we bought our TV from them last year.

      This is similar to Microsoft - I won't touch their OS or application software, but their game divi

      • Sony is a big company. Their content and entertainment divions may be on my sh*t list right now, but they have always (and still do) make darn good electronics hardware, when it isn't crippled by the other divisions.

        When the electronics division isn't being crippled by the other divisions, it is often being sued by them. Yes, this company is schizoid enough to take itself to court (and lose? win?) and has done so numerous times in the past; it's possible because it's really a congolmerate of several dozen m

    • Others have mentioned Samsung, but add iiyama to that list as well. Most of the LCD panels in the world are made by various asian companies, several of which will sell direct. I don't think Dell actually makes any, they just pay to have their badge sprayed on a casing (which is true of the vast majority of their 'products'; they're either designed and produced on contract, or Dell just owns the company that really makes them). Sony is a real hardware company who deserves your scorn. Not sure about HP, but L
    • How can I "vote with my dollars" when there is no one to vote for?
      Look on the bright side - at least there's somoeone to vote against. Plenty, in fact. More than enough. Hmm. Scratch that bit about the bright side. Best go and live in a wigwam somewhere.
  • You can draw your own conclusions, I saw it on the TV machine last night on ABC.
  • I just read the last Fortune magazine and there is an interesting interview with Dell's Chairman Michael Dell and CEO Kevin Rollins.

    My favourite part:
    "If you ask, 'Okay, is Dell in the penalty box?' Yeah, Dell's in the penalty box," is how Michael Dell puts it. "Then we'll use this opportunity to fix everything."

    Of course this was before this announcement of the investigation into Dell's finances.

    You can read part of the interview here:
    http://money.cnn.com/2006/09/04/magazines/fortune/ dell_intv.fortune/ind [cnn.com]
  • SEC: "Ah, the probulator's done."

    Dell: "That wasn't so bad."

    SEC: "Oh, wait, it hasn't started yet."

    *ding*

    Dell: *Aaaarrrrghhh*

    SEC: "Ok, it's about to start!"

    *ding*

    Dell: *AAAAAAAARRRRRRRRRRRRGGGGGGGHHHHHHHH !!!!!!!!!!!!!!!!!!!!!!*

  • Hmmm.... (Score:3, Funny)

    by Aqua_boy17 ( 962670 ) on Monday September 11, 2006 @05:26PM (#16084623)
    Sounds like they should be dumping some of those recalled batteries into the file cabinets.
  • Suprise mandatory overtime, have to pick up your kids? Quit and get them or stay and work. I had a friend who was asking for a few days off for her wedding months in advance, finally said she could have half a day off the day of the wedding? She had worked there 2 years and was one of the top performers in the call center. Needless to say, she quit.
  • I am going to purposefully make my dell laptop explode, injuring me in a non vital but "income altering" way. then i am going to claim i knew nothing of the product recall and sue them. I will make millions in compo, other people will start doing the same. and pretty soon, no more dell. then it will be replaced by another stupid and/or evil corperation and the cycle can begin again.. Ah the circle of life. and all because the second hand dell desktop i bought doesn't have room for another HDD. hold a grud

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