IBM Corp has been Sued by their Shareholder - BestCyberNews: Online News Presenter in the present world

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IBM Corp has been Sued by their Shareholder

According to Reuters IBM Corp has been sued by a shareholder who accused it of concealing how its ties to what became a major U.S. spying scandal reduced business in China and ultimately caused its market value to plunge more than $12 billion.

Spying is not good for business,companies are now loosing billions of dollars and most importantly the trust of their customer for invading privacy. The industry says it stands to lose tens of billions of dollars as customers in other countries turn to homegrown technology instead.

IBM (IBM), is facing a lawsuit over its cooperation with the NSA. IBM was sued yesterday by a shareholder claiming it violated federal securities laws in seeking to hide losses that stemmed from disclosures of its relationship with the NSA.

The plaintiff in the complaint, Louisiana Sheriffs' Pension & Relief Fund, said this threatened IBM hardware sales in China, particularly given a program known as Prism that let the NSA spy on that country through technology companies such as IBM.

The Baton Rouge pension fund said the revelation of Prism and related disclosures by former NSA contractor Edward Snowden caused Chinese businesses and China's government to abruptly cut ties with the world's largest technology services provider.

IBM reported in the Guardian, " 22 percent drop in sales in China compared with the previous quarter as a result of disclosures about its relationship with the NSA last summer,"

BusinessWeek reports that the shareholder filed a complaint on Thursday in a federal district court in Manhattan where the Louisiana Sheriffs’ Pension and Relief Fund claims IBM defrauded investors by allegedly concealing a decline in hardware sales in China following reports in the Guardian about the NSA program.

Loughridge is retiring as CFO this month at age 60, which IBM calls its traditional retirement age. Martin Schroeter, who has been IBM's head of global finance, is replacing him.

Author Venkatesh Yalagandula Follow us Google + and Facebook and Twitter

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