SEC Issues Rare Statement on IBM Inquiry
Investigation is No Go
The U.S. Securities and Exchange Commission took the rare step of announcing it closed its preliminary inquiry into IBM’s accounting last week. The commission generally only comments on inquiries once it takes action.
As reported on Thursday, the SEC Watch newsletter reported the SEC had opened a preliminary inquiry into IBM’s accounting practices. IBM had gained attention for its sale of its optical transceiver unit last December.
The story was widely reported and triggered a sell-off in technology stocks. IBM stock was particularly battered, dropping $4.82 to $84.19 in the wake of the revelation.
The SEC, whose job is to protect the integrity of the nation’s financial markets, responded that day by stating a preliminary inquiry into IBM had been opened, and subsequently closed. The commission planned no further action.
Chris McConnell is Product and Technology Editor for Enterprise Systems.