Dell will pay $100 million to settle charges by US regulators that it used hidden payments from Intel and fraudulent accounting to make it appear it was meeting Wall Street earnings targets.

The Securities and Exchange Commission alleged the computer giant did not disclose large exclusivity payments it received from Intel to not use chips made by its main rival, Advanced Micro Devices.

Those payments, “rather than the company's management and operations”, allowed Dell to meet its earnings targets for four years, the SEC said in a 61-page complaint.

Under the settlement, Dell chief executive Michael Dell and former CEO Kevin Rollins each agreed to pay $4 million. Former chief financial officer James Schneider agreed to pay $3 million.

Dell announced last month that it had set aside $100 million in its first quarter in preparation for a potential SEC settlement. It said Michael Dell entered into the settlements without admitting or denying the charges.

According to the SEC, Intel's exclusivity payments to Dell grew considerably over the years, peaking at 76% of Dell's operating income in the first quarter of 2007.

Without the Intel payments, Dell would have missed Wall Street's earnings-per-share estimate in every quarter from 2002 to 2006, the SEC said. Dell shares surged roughly 50% from 2002 to 2004.

Rather than disclose the benefits it received from Intel's payments, Michael Dell, Rollins, Schneider and others in regulatory filings cited “cost reduction initiatives” and “declining component costs” as reasons for Dell's increasing profit margins, the complaint said.

“Dell manipulated its accounting over an extended period to project financial results that the company wished it had achieved, but could not,” said Christopher Conte, associate director of the SEC's division of enforcement.

“Dell was only able to meet Wall Street targets consistently during this period by breaking the rules.”

Intel cut its payments after Dell announced plans to start using AMD chips, leading to a sharp drop in Dell's operating results which the company blamed on demand and pricing, according to the SEC complaint.