PDF

International Business Machines Corporation Class Action Lawsuit - IBM

Company Name
International Business Machines Corporation
Stock Symbol
IBM
Class Period
April 4, 2017 to October 20, 2021
Motion Deadline
June 6, 2022
Court
Southern District of New York
18 days left to seek lead plaintiff status

Case Summary

The IBM class action lawsuit seeks to represent purchasers of International Business Machines Corporation (NYSE: IBM) securities between April 4, 2017 and October 20, 2021, inclusive (the “Class Period”) and charges IBM as well as certain of its top executive officers with violations of the Securities Exchange Act of 1934.  The IBM class action lawsuit was commenced on April 5, 2022 in the Southern District of New York and is captioned June E. Adams Irrevocable Trust Dated 7/21/14 FBO Edward Robert Adams v. International Business Machines Corporation, No. 22-cv-02831.

If you suffered significant losses and wish to serve as lead plaintiff of the IBM class action lawsuit, please provide your information by clicking here.  You can also contact attorney J.C. Sanchez of Robbins Geller by calling 800/449-4900 or via e-mail at jsanchez@rgrdlaw.com.  Lead plaintiff motions for the IBM class action lawsuit must be filed with the court no later than June 6, 2022.

CASE ALLEGATIONS: As the IBM class action lawsuit alleges, by 2010, IBM began narrowing its focus from a mainframe supplier to a “cognitive solutions” and cloud computing platform company.  From 2015 through the end of 2018, IBM’s identification of IBM’s “Strategic Imperatives” and CAMSS (“Cloud,” “Analytics,” “Mobile,” “Security,” and “Social” sectors) became the financial metrics through which it intended to convey to the investing public that IBM’s reinvention to an IT services company was successful, profitable, and would be the driving force for IBM’s future.  IBM thus needed to demonstrate that IBM was delivering on these metrics.

To do so, the IBM class action lawsuit alleges that IBM improperly and in violation of Generally Accepted Accounting Principles embarked on a fraudulent scheme to shift billions of dollars in revenues from its mainframe line of business to its Strategic Imperatives and CAMSS lines of business.  Subsequent to 2018 and continuing through at least the third quarter of 2021, the IBM class action lawsuit alleges that IBM continued the fraudulent scheme to shift billions in revenues from the mainframe non-strategic side of the business to the strategic side of the business in order to prop up strategic revenues, increase its long-term incentive compensation, and appease the investing community while waiting for its new business model to come to fruition that started with the acquisition of Red Hat, Inc. in late October 2018 in combination with other intellectual property.

On October 16, 2018, IBM disclosed a shortfall in revenue and disappointing third quarter 2018 growth associated with IBM’s Strategic Imperatives and CAMSS lines of business, particularly its Cloud business line, causing IBM’s stock price to decline nearly 8%.  Beginning in 2019, IBM ceased the use of Strategic Imperatives Revenue as a financial metric and stopped reporting CAMSS, but the alleged fraudulent scheme to shift revenue from the non-strategic side of the business to the strategic side continued unabated while IBM waited for the new business model to penetrate the marketplace.

Then, on October 20, 2021, IBM announced a shortfall in revenue for the third quarter of 2021 with Cloud & Cognitive Software the main culprit.  The stock price had previously closed at $133.87 per share on October 20, 2021.  On this news, IBM’s stock price declined by nearly 10%, further damaging investors. 

THE LEAD PLAINTIFF PROCESS: The Private Securities Litigation Reform Act of 1995 permits any investor who purchased IBM securities during the Class Period to seek appointment as lead plaintiff in the IBM class action lawsuit.  A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class.  A lead plaintiff acts on behalf of all other class members in directing the IBM class action lawsuit.  The lead plaintiff can select a law firm of its choice to litigate the IBM class action lawsuit.  An investor’s ability to share in any potential future recovery of the IBM class action lawsuit is not dependent upon serving as lead plaintiff.

ABOUT ROBBINS GELLER RUDMAN & DOWD LLP: Robbins Geller Rudman & Dowd LLP is one of the world’s leading complex class action firms representing plaintiffs in securities fraud cases.  The Firm is ranked #1 on the 2021 ISS Securities Class Action Services Top 50 Report for recovering nearly $2 billion for investors last year alone – more than triple the amount recovered by any other plaintiffs’ firm.  With 200 lawyers in 9 offices, Robbins Geller’s attorneys have obtained many of the largest securities class action recoveries in history, including the largest securities class action recovery ever – $7.2 billion – in In re Enron Corp. Sec. Litig.

Main Menu