Dell Dashes Momentum

"We see this announcement as potentially part of a larger picture involving Dell's internal controls," wrote Conigliaro. The accounting issues in the investigation are the latest in a string of recent examples of ineffective controls in Dell's business, including "unnecessarily aggressive pricing, badly chosen go-to-market strategies and poor customer service-related decisions."

She said the government probe and the earnings delay could precipitate management changes. Goldman Sachs makes a market in Dell and has provided the company with investment and non-investment banking services in the past 12 months.

In an announcement late Wednesday, Dell said that the SEC has ordered a formal order of investigation into the company. In the past, Dell executives have characterized the SEC's contact with Dell as consisting of an "informal letter," asking a "fairly broad level of questions."

At the most basic level, the government's escalation of the probe from informal to formal status means it now can wield subpoenas.

This could indicate any number of things, says Michael Perlis, a former assistant director of the SEC's enforcement division who is now a partner at the Stroock & Stroock & Lavan law firm. The SEC may be having trouble getting Dell officials to voluntarily cooperate in the investigation, or there may be third parties related to the matter that cannot -- or will not -- participate, he says.

« Previous Page

1 2 3 4

Next Page »