CIO —

1. "Dell to Recall 4.1M Batteries Due to Fire Hazard,"
CIO.com, 8/15. It was the proverbial week from hell for struggling computer maker Dell. Early Monday news that the company would offer refunds to Chinese customers whose Dell laptops shipped with the wrong processor was bad enough, but that issue was totally overshadowed by an announcement later the same day that Dell would recall 4.1 million batteries. The recall was prompted after at least six Dell laptops around the world caught fire due to a defect in their lithium-ion batteries which were supplied by Sony. Sony has agreed to help pay for the recall. It’s unclear whether the defect affects other laptops powered by the same batteries, including Sony’s own Vaio models.

2. "Dell Acknowledges SEC Probe, Profit Falls,"
CIO.com, 8/18. And Dell’s week only got worse with the company announcing poor second-quarter results Thursday and confirming that its operations are under investigation by the U.S. Securities and Exchange Commission. The SEC is looking into how Dell recognized revenue and its overall financial reporting in previous periods prior to fiscal 2006. One bright spot was Dell’s extension of its relationship with Advanced Micro Devices, which will result in more Dell computers being powered by AMD’s chips. Until earlier this year, Dell was an Intel-only shop, instead of relying on both Intel and AMD for its processors as its peers in the industry already do.

3. " ‘Witch Hunt’ in the Silicon Valley,"
BusinessWeek, 8/15. As the SEC’s probe into backdated stock options has widened and the agency has filed its first criminal indictments, IT companies have begun to speak out publicly against what they term a "witch hunt." While instances of outright fraud should definitely be punished, executives like Network Appliance Chief Executive Officer Dan Warmenhoven think the probe has gone too far and become counterproductive, destroying investors’ confidence in high-tech companies. A lot of firms made administrative mistakes around the granting of stock options and are getting penalized for those past lapses, he said, estimating that there will be "10 cases of egregious behavior for every 1,000 cases of clerical mistakes."

4."FBI Calls Ex-Comverse Chief a Fugitive, and Casts a Wide Net,"
New York Times, 8/16. The hunt is on for one former CEO charged with securities fraud in relation to the SEC’s stock-option probe. Jacob "Kobi" Alexander, the ex-head of communications software company Comverse, is on the lam after he failed to turn up for his recent arraignment. The U.S. FBI has issued an arrest warrant for Alexander and alerted international police organization Interpol to his fugitive status. The former CEO is believed to be in Israel, since in July he wired about US$57 million to an account there from accounts in the United States.

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