International Business Machines Corporation (IBM) Misclassified Revenue to Address Market Expectations and Boost Executive Incentive Compensation
A shareholder filed a class action on behalf of persons and entities that purchased or otherwise acquired International Business Machines Corporation (NYSE: IBM) securities between April 4, 2017 and October 20, 2021, for violations of the Securities Exchange Act of 1934. IBM ranks among the world’s largest information technology companies, providing a wide spectrum of hardware, software, and service offerings.
According to the complaint, prior to and during the class period, defendants overstated IBM’s revenues from its strategic side of the business, by misclassifying and/or shifting revenues from its non-strategic mainframe part of the business, to appease market expectations about the Company’s future prospects and boost incentive compensation for its executives.
On October 20, 2021, IBM disclosed that it was going to suffer a revenue shortfall, with its Cognitive & Cloud Computing segment the main culprit. Unbeknownst to the investing public, the Company had stopped and/or curtailed its improper conduct, which caused Company results to suffer. On this news, IBM’s common stock fell almost $13.00, to close at $121.07 per share on October 21, 2022.
Next Steps: If you acquired shares of International Business Machines Corporation (IBM) between April 4, 2017 and October 20, 2021, you have until June 6, 2022, to ask the court to appoint you lead plaintiff for the class. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.