Former Dell Employees May Face Civil Action From SEC

Dell on Friday said its former employees may face civil or administrative action from the U.S. Securities and Exchange Commission in connection with an accounting probe that began in August 2005.

Several former employees had been contacted by the SEC in relation to the inquiry into Dell's accounting books, but no current employees have been contacted, said David Frink, a Dell spokesman.

The former employees received "Wells Notices," indicating that the SEC staff had reached a preliminary decision for the SEC to commence a civil or administrative action against the notice's recipients, Dell said in an SEC filing on Thursday.

The identities of the former employees have not been released, Frink said.

"It is possible that other individuals have received or will receive such notices," Dell said in the filing.

The company is being investigated by the SEC for issues of revenue recognition and financial reporting in certain periods prior to fiscal year 2006, dating back to 2001. Dell said it is cooperating with the SEC in the ongoing investigation, but a settlement agreement hasn't been reached.

"Any resolution would likely include monetary penalties, which cannot be quantified at this time, and other relief within the SEC's authority," Dell said in the filing.

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