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IBM has come to a settlement with the US Securities and Exchange Commission (SEC) following an investigation of the firm’s reporting of stock options, according to Vnunet.
In accordance with the agreement, IBM will comply with a cease-and-desist order barring it from violating certain sections of the 1934 Securities Exchange Act, but will admit no unlawful activity and will avoid all fines and further disciplinary action.
Prior to this ruling, the SEC asserted that IBM was able to lead analysts in predicting a lower growth rate than the company would achieve by failing to disclose the impact it anticipated following its decision to report employee stock options as an expense.
"The facts here are particularly troubling because the disclosure decision was driven, in part, by management’s perception of how the news would be interpreted by analysts," said Scott Friestad, associate director of enforcement at the SEC.
