Dell on Thursday said the Nasdaq stock exchange has started delisting proceedings against the computer maker for failing to file its quarterly financial report with the Securities and Exchange Commission.
The move was not unexpected. Michael Dell told analysts at the Round Rock, Texas, company's Tech Day event in New York this month that Dell expected to receive a delisting notice. The company has delayed filing its 10-Q report because of investigations into its corporate finances.
Dell has requested a hearing before the Nasdaq Listing Qualifications Panel, which stays proceedings against the company until the panel makes a decision. In the meantime, trading on Dell stock continues.
A publicly traded company is required to file with the SEC a 10-Q report on its financial performance within 35 days after the end of each of the first three quarters. Dell's second fiscal quarter ended Aug. 4.
The SEC is conducting an informal investigation into "certain accounting and financial reporting matters," according to Dell. The U.S. Attorney for the Southern District of New York has also launched an investigation, and has subpoenaed documents related the Dell's financial reporting from 2002 to the present.
Dell's delisting notice was announced a day after Novell said the SEC had taken similar action against it. The two companies are among dozens of tech companies currently under investigation for their financial reporting.
SEC Chairman Christopher Cox told a Senate panel this month that the agency is investigating more than 100 companies for possible fraudulent reporting of stock option grants.
The scandal centers on the practice of backdating stock options -- retroactively granting options on dates when a company's stock price is relatively low, maximizing the potential profits for the option holder.