A pension and relief fund that sued IBM for failing to warn investors of loss of business in China because of its alleged involvement with spying by the U.S. National Security Agency has backed out of the case. The Louisiana Sheriffs’ Pension and Relief Fund claimed that IBM failed to inform investors that sales in China would slow after disclosures that IBM was allegedly cooperating with a NSA spying program.
IBM spokesman Doug Shelton said that the complaint proceeded to make numerous specious and false accusations, and IBM called upon the law firm that filed this action to do the right thing and dismiss it. We are pleased that they have done the right thing. Robert C. Weber, IBM’s senior vice president and general counsel, said the suit was “pushing a wild conspiracy theory.”
IBM had attributed a drop in hardware sales in the third quarter partly to delayed procurement by Chinese government agencies while the local government framed a new economic policy. The pension fund claimed that IBM knew that the Chinese government would prohibit purchases of its products by businesses and government agencies after reports of its alleged involvement in a NSA spying program called Prism. IBM actively concealed the immediate impact the revelation of Prism had on the company’s business in China, the complaint said.
IBM denied this and said that the company had not provided client data to the NSA or any other government agency under Prism or under any surveillance program involving the bulk collection of content or metadata. Biggish Blue has not provided client data stored outside the US to the U.S. government under a national security order, such as an order under the Foreign Intelligence Surveillance Act or a National Security Letter.