Securities and Exchange Commission v. Dell Inc. and Michael Dell

The SEC alleged that Dell did not disclose the effect of discounts Dell received from Intel on the Company’s financial results and the effect that Dell’s sourcing of processors from AMD would have on these discounts and the Company’s future profitability. Compass Lexecon expert Allen Ferrell filed a report demonstrating that there was no systematic relationship between the size of the discounts received from Intel and Dell’s profits and that when Dell disclosed that it would begin sourcing processors from AMD, Dell’s stock price was not affected. Compass Lexecon experts Daniel R. Fischel and Kenneth Lehn also filed a report demonstrating that the alleged undisclosed information was publicly available and that additional disclosures of the Intel discounts would not have affected Dell’s stock price. The case settled on very favorable terms. Professors Ferrell, Fischel, and Lehn were assisted by David Gross and Mike Keable in Compass Lexecon’s Chicago office. We worked with John Savarese and Wayne Carlin of Wachtell, Lipton, Rosen & Katz and David Zornow and Charles Walker of Skadden, Arps, Slate, Meagher & Flom LLP.