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Company News

UPDATE 1-EMC agrees to pay $87.5 mln to settle U.S. probe

* EMC to restate Q4 results, cut profit by 1 cent per share

* Company denies any wrongdoing

BOSTON, Feb 26 (Reuters) - EMC Corp EMC.N said on Friday that it has agreed to pay $87.5 million to settle a U.S. probe into its pricing practices on sales to federal government agencies, without admitting any wrongdoing.

“EMC and the Department of Justice have agreed in principle to a settlement,” said EMC spokesman Dave Farmer.

The deal averts the risk that the maker of data storage equipment could be suspended or disbarred from selling goods to the U.S. government, one of the world’s biggest buyers of technology products.

The company also said it would restate earnings for its fourth quarter ended Dec. 31, 2009, to reflect a 1 cent charge related to the settlement as well as a previously announced reorganization of its international operations.

It reduced its fourth-quarter net income per share to 19 cents from 20 cents.

The investigation by the U.S. Justice Department, disclosed a year ago, concerned allegations about EMC’s fee arrangements with system integrators and other companies that partnered with the storage equipment maker in selling products to federal agencies.

Investigators examined whether EMC violated the terms of agreements through which it sold goods to the government, including potential violations of the False Claims Act, according to EMC’s filings with the U.S. Securities and Exchange Commission. (Reporting by Jim Finkle)

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