IBM Is Being Sued Over NSA Scandal
International Business Machines (NYSE:IBM) is being sued by a shareholder over the detrimental effect the National Security Agency scandal has had on the company’s business in China, which has dragged on IBM’s financial results since Edward Snowden leaked NSA documents this summer.
According to a report from Reuters, the suit claims that IBM covered up the extent to which it was allowing the U.S. government access to its customers’ personal information. After it was revealed that the NSA was spying on foreign users of American tech companies, China promptly abandoned giving business to U.S.-based technology companies. That drop in business has shaved $12 billion off IBM’s market value, Reuters reports.
The Louisiana Sheriffs’ Pension & Relief Fund, the plaintiff in the suit, said that IBM knowingly risked its business in China by giving the government more information on Chinese customers than the company was required to by law. IBM Chief Executive Virginia Rometty and CFO Mark Loughridge are named as defendants.