Feeds

IBM hid China's reaction to NSA spying 'cos it cost us BILLIONS, rages angry shareholder

Lawsuit claims US snooping led to 22pc Chinese sales slump

Beginner's guide to SSL certificates

An IBM shareholder is suing Big Blue, accusing it of hiding the fact that its ties to the NSA spying scandal cost it business in China – and wiped billions off its market value.

The Louisiana Sheriffs' Pensions and Relief Fund has filed the suit in New York, claiming that Big Blue "misrepresented and concealed" that its association with the NSA caused Chinese companies and the Chinese government to abruptly stop doing business with it, according to the shareholder's lawyers.

"When the company ultimately revealed the truth regarding the collapse of its business in China, the price of IBM stock fell almost $12 per share," the legal team said in a statement, while inviting other shareholders to join the suit.

IBM lobbied the government in favour of a bill that would allow it to share customers' data with the NSA, including information from its clients in China, the complaint said. When NSA whistleblower Edward Snowden leaked the documents uncovering the Prism surveillance programme and IBM's connections to it, Chinese organisations started severing ties with the firm, but it did not disclose this to investors, the court filing went on to allege.

In October, Big Blue reported third quarter earnings that missed estimates by a billion dollars, including a fall in Chinese sales of 22 per cent and a 40 per cent drop in hardware sales, which the suit attributes to the NSA revelations.

In the following days, IBM shares dropped 7.4 per cent to $172.86, wiping $15bn from its market capitalisation. Stocks closed yesterday at $173.37.

The pension fund wants to kick off a class action suit that represents any investors who bought IBM stock between June 25 and October 16, the time period during which it alleges that Big Blue knew something was up in China but said nothing.

IBM told The Register in an emailed statement that the suit was "ludicrous and irresponsible" and said it would be vigorously defending itself in court." ®

Intelligent flash storage arrays

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
Edward who? GCHQ boss dodges Snowden topic during last speech
UK spies would rather 'walk' than do 'mass surveillance'
YARR! Pirates walk the plank: DMCA magnets sink in Google results
Spaffing copyrighted stuff over the web? No search ranking for you
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
prev story

Whitepapers

Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.