The Securities and Exchange Commission (SEC) said yesterday that IBM had settled a case in which it had been accused of misleading investors by overestimating the impact of stock-based compensation expenses on quarterly earnings in 2005, reported Reuters.
The agency said in a statement that the International Business Machines Corporation had agreed not to commit future disclosure violations, reported Reuters.
The SEC did not impose any monetary penalties, and IBM, the world's largest technology services company, did not admit or deny the findings in the settlement announcement, reported Reuters.
"IBM misled investors by failing to disclose information that would have allowed them to accurately determine the impact that the company's decision to expense stock options would have on its financial results,"Â the agency's associate director of enforcement, Scott W. Friestad, said in a statement, according to Reuters.
In a conference call on April 5, 2005, IBM led analysts to believe that the company expected stock option expenses to reduce first-quarter earnings by 14 cents a share and to reduce full-year earnings by 55 cents a share, the SEC said, according to Reuters.
- New York State Society of Certified Public Accountants
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