British council prepares action on Dell
Wolves circles in insider dealing case
Californian lawyers have applied to bring a class action law suit against computer giant Dell with Wolverhampton City Council's pension fund as lead plaintiff.
Patrick Daniels of Lerach Coughlin law firm alleged on Channel4 News last night that Dell executives had conducted "one of the largest cases of insider trading in US history."
The programme said that the fund had alleged that between February 2003 and September 2005 Dell executives sold around 99 million shares they held in Dell for more than $3.3bn after artificially inflating the price. The firm is alleged to have improperly reported loyalty payments Intel made to Dell in exchange for the privilege of being its sole supplier of PC microprocessors.
Dell said it could not comment on "matters involving pending litigation".
Intel told the programme that there had been no wrondoing; "Significant portions of the allegations appear to be entirely made-up," it said.
The class action status had not yet been granted, but an application has been made. It was filed on behalf of the West Midlands Superannuation Fund, a pension fund with almost a quarter of a million members and assets of nearly £7bn, and which is administered by Wolverhampton Council.
The application alleged that all Dell's executives but founder Michael Dell sold between 70 and 100 per cent of their eligible shares during the period. Michael Dell sold only 27 per cent of his shares, but these were worth nearly $3bn.
Dell's share price slumped over this time from $40 to $20 dollars a share, said the programme. That left the pension fund, which had an investment in Dell, feeling short changed. But there might have been other reasons for the price slumping.®