The Sydney Morning Herald reports that Michael Dell is feeling the heat of the spotlight after his company announced it would restate financial results for a four-year period beginning in 2003. The announcement came at the completion of the company's internal investigation of accounting practices, which revealed that employees fudged the numbers on accruals and reserves or filed incomplete results -- all to meet quarterly earnings goals.
Though company stock soared when the investigation ended, some observers wonder whether Dell investors are taking a big risk with Michael Dell at the helm. Dell served as CEO during three of the four years at issue and was chairman of the board from 2002 into 2006. An analyst from Friedman, Billings, Ramsey & Co. told the SMH:
From an investor standpoint, the risk that Michael Dell is involved is arguably one of the most significant risks remaining in this.
Official word from the company is that Dell was not involved in the misconduct, the story says, but a spokesperson did point out that,"The company's leadership team takes responsibility overall." Securities and Exchange Commission and Department of Justice inquiries into the misconduct are reportedly ongoing.