IBM embroiled in accounting scandal
The US Securities & Exchange Commission is considering bringing civil action against computer giant IBM over possible accounting violations in relation to a client of one of its business units.
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In a statement issued today, IBM said it had a received a ‘Wells Notice’ – a not warning of possible civil action – from the SEC in relation to an investigation of a customer of IBM’s Retail Stores Solutions unit, which sells point-of-sale products.
The company said it believed an employee in its Sales and Distribution unit has also received a similar notice in connection with this matter.
The possible action by SEC relates to ‘IBM’s possible violations of the US securities laws relating to Dollar General’s accounting for a specific transaction, by participating in and aiding and abetting Dollar General’s misstatement of its 2000 results’.
‘In that transaction, IBM paid Dollar General $11m (£6m) for certain used equipment as part of a sale of IBM replacement equipment in Dollar General’s 2000 fourth fiscal quarter.’
IBM has the opportunity to respond to the SEC before a decision is taken on possible action against the company.
IBM says it was ‘cooperating fully with the investigation relating to Dollar General and the separate SEC investigation relating to the recognition of revenue by IBM in 2000 and 2001 primarily concerning certain types of customer transactions’.
