Wednesday, April 1, 2015

Labaton Sucharow Files Class Action on Behalf of Investors in IBM

NEW YORK (April 1, 2015) — Labaton Sucharow LLP filed a securities class action lawsuit today in the U.S. District Court for the Southern District of New York. The lawsuit was filed on behalf of all persons or entities who, between January 22, 2014 and October 17, 2014, inclusive (the class period), purchased or otherwise acquired the publicly traded securities of International Business Machines Corporation (IBM) (NYSE: IBM). 

If you purchased or acquired publicly traded IBM securities during the class period, you are a member of the "class" and may be able to seek appointment as lead plaintiff. Lead plaintiff motion papers must be filed with the U.S. District Court for the Southern District of New York no later than May 1, 2015. A lead plaintiff is a court-appointed representative for absent members of the class. You do not need to seek appointment as lead plaintiff to share in any class recovery in this action. If you are a class member and there is a recovery for the class, you can share in that recovery as an absent class member. You may retain counsel of your choice to represent you in this action. If you would like to consider serving as lead plaintiff or have any questions about this lawsuit, you may contact Rachel A. Avan, Esq. of Labaton Sucharow, at (800) 321-0476 or (212) 907-0709, or by email at ravan@labaton.com.

IBM, a global information technology company, manufactures and sells computer hardware and software and offers a variety of technology services. Prior to October 20, 2014, IBM's operations included its microelectronics business that was primarily responsible for the design and production of microchips used in certain of the company's server computers and other devices.

The complaint charges IBM and certain of its officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and U.S. Securities and Exchange Commission Rule 10b-5 promulgated thereunder. The complaint alleges that during the class period, defendants made false and misleading statements and concealed material information relating to the true value of the company's microelectronics business and the segment's assets. Specifically, the complaint alleges that, throughout the class period, IBM concealed a substantial decline in value of the microelectronics business and its assets, despite a history and outlook of severe operating losses. Instead, IBM reported values of approximately $2.4 billion relating to long-lived assets within the Microelectronics segment in the company's financial statements throughout the class period.

The truth regarding the value of IBM's microelectronics business and its assets was revealed on October 20, 2014, when it announced an agreement to transfer this business to GlobalFoundries Incorporated, along with a $1.5 billion incentive payment. IBM further disclosed that its microelectronics business had lost $700 million in 2013 and was projected to suffer a similar loss in 2014. In reaction to these disclosures, IBM's stock price fell $12.95 per share, or 7.11 percent, to close at $169.10 per share that day.

The magnitude of IBM's overstatement of its assets during the class period was confirmed on October 28, 2014, when the company filed its quarterly report on Form 10-Q for the third quarter of 2014. In this quarterly report, IBM recorded a $4.7 billion charge, more than half of which represented a total write-off of the entire $2.4 billion value of the long-lived property, plant, and equipment assets of the microelectronics business.

The official press release is available here.