Investor Lawsuit Blames NSA For $12B Loss In IBM Value 204
Posted
by
timothy
from the anyone-can-file-a-lawsuit dept.
from the anyone-can-file-a-lawsuit dept.
Jah-Wren Ryel writes "IBM Corp has been sued by the Louisiana Sheriffs' Pension & Relief Fund which accused it of concealing how its ties to what became a major U.S. spying scandal reduced business in China and ultimately caused its market value to plunge more than $12 billion." While anyone can file a lawsuit, being sued by an institutional investor is a little different than being sued by John Q. Disgruntled.
I was wondering (Score:5, Interesting)
Re:I was wondering (Score:5, Interesting)
when this would happen. You just had to know that someone would go after them for this. I wonder how it will hold up in court. The bigger question I have is what else will be found during discovery
Well, they'll settle out of court if discovery is an option, and ... IBM isn't just someone. They're looking for ways to mitigate their (other) problems.
... Facebook going after them. Or Microsoft. Or Apple. Or Samsung.When a company that is already 'losing ground' looks to blame others for their problems, that's a different scenario than a company that isn't threatened pursuing the same lawsuit. The outcome may be the same, which may be all that matters (to some, in theory), but the reasons are completely different. You wouldn't say that a police officer breaking a window to enter a home is the same as a criminal breaking a window to enter your home ... one is looking to profit, the other is looking to protect (again, in theory).
No, this is distinctly different than, say
Re:I was wondering (Score:5, Interesting)
I expect that if lawsuits become a problem in this regard that a previous solution for a similar problem will be reused. Actually, that very solution may apply in this case in some regards.
Obama administration backs telecom immunity [sfgate.com]
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Re:I was wondering (Score:4, Insightful)
The bigger question I have is what else will be found during discovery
REDACTED
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Yes, I predicted as much when the Snowden stories of tech company collaboration started coming out.
This is where money meets government head-to-head.
I know directly that companies like Wells Fargo are going to Linux in order to avoid the obvious vulnerabilities and compromised states of Windows. And I know they aren't the only ones. Moving away from [US Government] compromised technology is exactly what every security concerned business should be doing right now. The shareholders, obviously, demand it.
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Maybe they can hire Snowden to help them with discovery. Could be something useful to the litigants in the unreleased documents. Although I guess it could be tough to get NSA to authenticate them so they'd be admissible evidence.
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This is not IBM suing the NSA. This is an investor of IBM suing IBM for cooperating with the NSA, and thereby damaging IBMs market valuation, causing said investor to lose money.
Oh, the irony (Score:5, Insightful)
Subject/citizen, you should not be concerned about your rights when it comes to security and law enforcement. But, we need legal remedy for business decisions that impact our nice retirement funds. Yeah...
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I am just guessing here, but the number of EFF/ACLU/EPIC supporters who are helping fight back is probably way higher than the number of people who saw a difference in valuation of their pension as a result of this market blip.
Your derision is therefore both ill-conceived and clearly unconsidered.
Completely unrelated subjects here. Louisiana Sheriffs' Pension & Relief Fund is a very small entity in the scheme of business, representing a single state's retirees for a single occupation. "We" in that ca
For the sake of national security (Score:5, Interesting)
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I feel like the NSA and the rest of the intelligence apparatuses have gotten to a point where the security of this nation trumps any man made law. If this nation is of and for the people, who the hell is the NSA working for?
The 1%ers
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Funding and legality is part of the dance with every generation of political leaders and the US/UK press.
Usually political leaders are so addicted to predictive 'insider' files, news and trading that they are totally locked into the system.
The press traditionally needed access so stories could be blocked or changed before publication.
Book publishers could als
upper class are the stockholders who were hurt (Score:2)
Funny you should make that claim in the context of an article about the losses to stockholders caused by NSA. The "upper class" is the people who have a lot invested in these companies - the people who lost part of their savings. The upper class is the executives getting sued for complying with court orders. It's the "upper class" who are MATERIALLY harmed by the NSA's actions. The rest of us are merely offended by the violation of our rights, but not really materially harmed.
The NSA serves two masters, ne
Re:upper class are the stockholders who were hurt (Score:4, Insightful)
Psychopaths (1% of the population) generally have very short term outlooks and winning a particular goal whilst completely ignoring all consequences is basically normal behaviour for them. So garnering as much information as possible about everyone possible in order to build up a global extortion database so as to be able to blackmail every possible future politician into puppet like obedience (Uncle Tom Obama the choom gang coward) far outweighed the inevitability of getting exposed with so insane and psychopathic a conspiracy. This was not just the NSA/CIA but a whole range of major US military industrial complex contractors as well as telecoms, so all sorts ramifications will continue to play out for the next decade or so, all as a result of a series of individuals egoistically fulfilling their own perversions and delusion of power, total power, over everyone (really crazy psychopathic stuff, the 1% at their core).
Re:For the sake of national security (Score:5, Insightful)
...and it's not doing so, which is why the Snowdens and Mannings who hide within, ready to spill the beans and grind them into flavorful Bochinche coffee, should have the nation's support, respect, and honor.
NSA/CIA Chilling effects, billion lost. (Score:5, Interesting)
I can't see how anyone is surprised here.
Would you purchase anything made by USA companies now if you want your data secure and safe?
I gave up starting a cloud storage busines for companies hosting apps/storage because there is no way to claim you have a secure and safe storage system when the goon squad can come in with grenades and machine guns and blow the place up looking for any sort of activity they feel is not "legal".
Secondly, the whole idea that companies outsource I.T. operations to reduce cost can't be made any more with any western institution. The result?
About 40 people I was going to hire to start this business won't see the light of day.
This is not just me either. In the investment circles I follow lots of people are leaving or simply shelving plans for any sort of real I.T. services expansion in the USA.
Those companies that are left and do hosting, Amazon, Google, Microsoft are doing so only because they already share all of their clients data with the NSA/CIA and are permitted to exist as a result.
The whoel thing is fascist and there is no competition under those sorts of conditions.
-Hack
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What method of encryption would make such a storage business reasonably safe?
For example, could you offer encrypted storage of senstive items and not hold the keys yourself? If the customer loses theirs they'd be locked out of their stuff, but no one else could get to it either.
Find a model where you can't help the pigs, and even if you suddenly wanted to, no problem.
Re:NSA/CIA Chilling effects, billion lost. (Score:5, Funny)
About 40 people I was going to hire to start this business won't see the light of day.
Where do you keep these candidates and why not let them have some sunlight even if you don't hire them?
Re:NSA/CIA Chilling effects, billion lost. (Score:5, Funny)
Vampire-based businesses traditionally don't do well anyway. Employee retention is difficult because when you tell them you're going to give them a stake in the "business" they misunderstand and flee.
Re: NSA/CIA Chilling effects, billion lost. (Score:5, Funny)
Be careful. That chip is labeled as being a 74LS245 but it's really a PIC16F84 programmed to act as one.
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What's it going to do. Send some data on an unknown bus and crash?
I hear a lot of the conspiracies of fake chips from China. If I were buying a full SOC with Ethernet capability and memory to spare then maybe I will start to worry. If I buy a logic device I could not care less. There are hundreds of thousands of applications for logic devices, and I could think of only a handful where the device itself could do something as nefarious like spying (like buffering the output to an ethernet controller). As long
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Unless you made the logic gates yourself, how can you be certain your binary adder is not just an arm chip emulating a logic gate, that turns your binary counter into a satellite link and secretly shift your bits to the NSA when it detects it's not hooked up to a logic analyzer?
Upgrade your tinfoil hat man for fscks sake!
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Re: NSA/CIA Chilling effects, billion lost. (Score:2)
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Now countries might be a bit more wise and air gap the deep back end of their core databases and only offer a daily networked cash flow and orders.
The global firms still get to enjoy just in time orders but the ability of outside spies/govs to easily look deep into past orders might need physical access.
6.4 percent (Score:5, Insightful)
Re:6.4 percent (Score:5, Informative)
Re:6.4 percent (Score:4, Insightful)
In addition, IBM shares recovered almost all their 6.4 percent loss within a month!
You don't understand. That recovery should have been an additional increase from the pre-decline price. These investors should not be even, they should be up 6.4%. Don't you understand that if stocks go down someone did something wrong and needs to be sued?
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I understand that stocks drop temporarily on bad news. Class action lawyers solicit clients who happened to sell when the price was down, incurring a loss.
The class action lawyers are going to say that IBM's dealings with the NSA + lobbying to disclose Chinese information is material information that should have been disclosed to investors.
The lost money is going to be a second issue to be dealt with in the case.
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IANAL.
Some people sold their stock during the dip. If the dip was due to a risk that the management had an obligation to disclose earlier, then, those people who sold during the dip may be entitled to compensation.
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"only 6.4 percent"
That is significant, more so as this is a start of a long term downward trend!
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Which year?
Not the point (Score:2)
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Re:6.4 percent (Score:4, Insightful)
Unfortunately for the investor, the NSA would have ordered IBM not to reveal that information. IBM's obligations to investors don't trump it's obligation to obey the law, even when the law is wrong-headed. And good luck suing the NSA.
Fatcat Pensioners. (Score:4, Insightful)
1: Pot calling Kettle Black; The Sheriffs actively participated in illegal wiretaps and clandestine domestic operations and were even trained by the federal agencies on how to handle protests and riots. See: Katrina. They knew damn well who IBM was in bed with.
2: Predatory Societies always grow until they run out of livestock, then they turn on each other. A predator knows no other skill, and their skill can't make bread. They know what they are doing is immoral and they're doing it anyway because it's the only thing they know how to do.
3: We're about to find if NSA Gag letters are permissible in court, and indemnify executive management from failing to disclose them on 8-k and 10-k filings...
4: A rotten corrupt government doesn't produce pension funds for police; it STEALS your pension irregardless of who you are or who you work for then they try to pump and dump, crash and buy, cajole, mind-fuck and carrot and stick an ever greater percentage of the economy and people's lives under their control for whatever demented reason all while dangling numbers on a piece of paper in-front of your face. Now that you're riled up, as elected officials ya'll should start putting banksters and financial wizards in jail and properly protecting the productive side of the economy who pays your paycheck from the unproductive, self-destructive side. Your pension is gone, ya might as well ruin the lives of the people who stole it and have some dignity when you're a 70 year old mall cop.
5: IBM is now a mostly Indian company that produces services and products nobody wants; the only companies that stick with them are their institutional partners and even THEY are leaving them behind due to financial necessity. You can only sell so many computers and services with 50-150% markup because "there's magic inside we can't describe". Their days of coasting along on reputation are nearing a very abrupt end.
There is no opportunity in China ... (Score:5, Insightful)
The NSA is a convenient public excuse for China doing what it had planned to do all along.
As an employee of IBM.... (Score:3, Insightful)
I can assure you the loss in value has nothing to do with the NSA and everything to do with horrible management. For years their plan to increase profits is to cut American jobs for cheap new hires in emerging countries. At some point we'll actually need to make something to sell when there is no one left to fire...
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Back in the 90's, I worked for watson and watched the company come back from the grave. This time, it will die.
LOL (Score:2)
Basically, companies like IBM, HP, and MS are going the same way as DEC, AOL, Novell, etc.
Pulling a Huawei on IBM (Score:2)
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The word is Nazgul.
I hope Cisco, Microsoft, Google got sued as well (Score:4, Interesting)
This could get very interesting
I will be TRULY INTERESTING when institutional investors not only sue IBM, but also sue Cisco, Microsoft, Google and all other companies associated with NSA.
We the people, as individuals, have no power over that arrogant NSA - and those corporations, especially Cisco and Microsoft which had been in extra-ordinary friendly term with NSA, must face the same music IBM is facing, for what they have done.
Not a Institutinal Investor (Score:2)
Yawn. "Louisiana Sheriffs' Pension & Relief Fund" is barely a institutional investor even if it is one. Most of the work would be farmed out.
Besides, this is a class action lawsuit by lawyers hoping to hit the lawsuit lottery. What they need is a unrelated party to be the lead plaintiff. Preferable someone sympathetic to pull the juror’s heartstrings. Windows and orphans do well. If you can't get one of them but a “aw shucks we are a simple pension fund helping good people that was taken by
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"Besides, this is a class action lawsuit by lawyers hoping to hit the lawsuit lottery."
I guess I am getting a bit lost at the judgement of some of the lawyers in these various stories. So who in the Louisiana Sheriff's ... Fund decided it was a good idea to sue ... IBM?!
Isn't IBM going to do a lawyer version of a Tombstone Piledriver on their head for dragging them into MemeSpace?
Forget the Viral Cats. It's Viral News I can't understand properly these days!
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Re:Let Me Get This Straight (Score:5, Informative)
They may as well be suing the NSA, considering what would come out in discovery if this lawsuit is allowed to proceed. Or rather, what won't come out, in the interest of "national security."
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" NSA's invulnerable legally."
That's simply not true. There are a number of suits against them going forward right now.
Government (and, more to the point, people in government) are NOT immune from the law. The idea that they are (or even worse, should be) is absolute hogwash.
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Re:Let Me Get This Straight (Score:5, Insightful)
"I was unaware that it is against US law for a US Federal agency tasked with intercepting communications of non-Americans to spy on China."
It isn't. But it *IS* illegal (despite their claims otherwise) to spy on Americans in the process of spying on China. UNLESS they can SHOW some kind of probable cause to believe that American is involved in spying.
That's what the FICA Court rules say, and that's what EFF has been saying all along.
And they haven't just been spying on a few Americans... they've been spying on everybody they had the ability to spy on... regardless of any even pretended connections to espionage. And that is CLEARLY illegal. It's not even a matter of debate.
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They are immune from the law in most cases, except where they waive sovereign immunity.
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"They are likely to have sovereign immunity for their actions unless it has been waived, legislated away, or there is an existing precedent."
The NSA is not even remotely "sovereign", in any sense of the term.
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As a part of the Federal government it is.
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"As a part of the Federal government it is."
NO, it isn't.
The States that make up the United States are sovereign. The Federal government, by itself is not.
The United States is not a "sovereign nation". In fact it is not a "nation" at all. It is a Republic of Sovereign States.
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I believe what's meant by "sovereign" here is "sovereign immunity", by which the US government (including the NSA as a Federal entity) is immune from lawsuits unless it consents to be sued.
YMMV under the Federal Tort Claims Act and/or the Tucker Act, but basically, the NSA enjoys the Federal government's umbrella immunity from suit which, under limited circumstances, may be rebutted or overcome.
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"I believe what's meant by "sovereign" here is "sovereign immunity", by which the US government (including the NSA as a Federal entity) is immune from lawsuits unless it consents to be sued."
That does sound vaguely familiar. But if so, it is misnamed, because the Federal government has no "sovereignty", per se.
The States and The People are sovereign in the United States. Not the Federal government.
Re:Let Me Get This Straight (Score:4, Informative)
The US gov likes to try color of law, state secrets and really push the need for expensive cleared legal staff to keep the tame US press away.
The US Constitution covers all actions by the NSA domestically and no US "gov" granted US "immunity" laws can legally out pace that
In the end the staff are usually cleared and internal changes are 'made' just to make the cases fail to gain any more domestic traction and US press attention.
Then you had Snowden who did the smart thing and went to the press, escaping the 'internal' US gov legal trap that is domestic whistleblower protections.
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Maybe they're suing IBM for allowing a clandestine operation to affect their stock price?
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And to clarify, they would have been fine with participation. Only the effect on stock price is in question.
The NSA actions, IBM actions, none of that is part of this.
Failure to disclose risks to revenue, and major ones at that, is serious for public companies.
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Hell, they were able to deal with the fall out from working with the Nazi's as a "cost of doing business". I am pretty sure this lawsuit is not going to go very far.
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If they're suing IBM then their action is futile and self-damaging. Money in any decision will go to 3 places, all of which hurt those suing. 1. Government 2. Lawyers 3. All stockholders in proportion to the shares they own. #3 means that IBM's money, which is owned by the stockholders, is transferred to the stockholders: no net gain, + administration costs, + time wasted in the lawsuits.
If they're suing the chief officers, the COs have little money compared to IBM, unless the COs have insurance against thi
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If that is true then there's rather unfortunate implications for the entire investment system. After all, the issue in question is that IBM was engaged in activities that would obviously lower its likely future profits, yet failed to notify the markets of them. If suing them for that is futile, what's to stop any other company from doing the same?
IBM's money is owned by the IBM, not stockholde
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"Is this the same type of local law enforcement agency... "
It's not any kind of law enforcement agency. It is a financial institution. It just happens to specifically handle funds for people that work for local law enforcement.
Re:Capitalism Democracy? (Score:5, Insightful)
Re:Capitalism Democracy? (Score:5, Interesting)
They don't always shut down the company.
Sometimes they just arrest the COB/CEO. You don't really imagine there was zero connection between Joe Nacchio [wikipedia.org] of Qwest refusing to give NSA customer records without a court order (this back in 2001) and his being arrested and jailed for insider trading, do you?
(He may have engaged in some questionable trades but nothing that other corporate execs have done without getting hit with such severe penalties.)
Re:Capitalism Democracy? (Score:5, Insightful)
NSA has been acting as the boot forever stomping on the human face. This kind of behavior can be stopped by Obama (he's further up the NSA's chain of command, but still in the chain of command) but he hasn't done so. I can only guess that he's a force behind illegal NSA activity to which he'll still claim he "didn't know" about, just as he's claimed ignorance on the ACA website, or NSA surveillance on European allies. He's still culpable for the NSA's illegal activity, will he claim he didn't know that he has broken his oath to uphold and defend the US Constitution?
Re: Capitalism Democracy? (Score:2)
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I don't think the problem here is that IBM worked with the NSA. Problem is that as a shareholder IBM should have said something more about it and keep shareholders informed about the risks towards the share price. At minimum IBM should have stated it is working closely with US government organisations in electronic surveillance programs, which may cause loss of business if political environment changes.
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Lavabit was a mom and pop store. Your paranoia does not extend to established business, which have the option to fight back but choose not to.
IBM would have survived saying no. They would have had an enormous expense in doing so.
Re:Capitalism Democracy? (Score:4, Informative)
Your paranoia does not extend to established business, which have the option to fight back but choose not to.
Oh how I pine for the day when I believed that shit. We were such a more innocent populace, weren't we? Go look up MKULTRA to start, and follow the Wikipedia links from there for a few hours. CEOs of companies, deans of universities, directors of hospitals, they were all in on it and that was the 1950s.
You think that sort of thing isn't going on now? The "option to fight back," oh good heavens, someone catch me before I pass out from laughter.
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Are you saying that the " CEOs of companies, deans of universities, directors of hospitals, they were all in on it" - but now they are the subjects of mind control? Or that somehow once a result becomes desirable, that the behavior of the C-suite and board of executives are being mind controlled to produce that desired result? I can't think of one reason for you mentioning it that isn't absolutely raving shit-eating lunacy.
I was probably reading about that before you were born. Oh yes, since well before
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i dont think you understand the underlying problem. American companies CANT say no to the government, because they get shutdown. dont you remember lavabit? he did say no to the NSA, and then they started prosecuting him for not giving them the information they wanted.
You've kind of scrambled the history there.
Companies do say no to the government all the time unless the government has the actual right or power to make a demand. In Lavabit's case, Lavabit was defying a court order that only became necessary when they didn't meet a much more limited request from the FBI, which the FBI has the power to make. And it was Lavabit's choice to do that - both the defiance, and the shutdown. Lavabit's owner had a bad business model predicated on making promises he couldn't leg
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The members of the FISA court are public record, they are judges from other courts that rotate through the FISA court. The function of the FISA court is documented. You seem disinterested in the facts of the matter.
THE FOREIGN INTELLIGENCE SURVEILLANCE COURT - 2012 Membership [fas.org]
Foreign Intelligence Surveillance Court [fjc.gov]
Re:Capitalism Democracy? (Score:4, Insightful)
Re:Capitalism Democracy? (Score:4, Insightful)
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Choose wisely as to what that issue will be, and how you will conduct your protest or revolt. You could end up in the history books as an example of wisdon, courage and character [wikipedia.org], or foolishness and fail [wikipedia.org].
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American companies CANT say no to the government, because they get shutdown. dont you remember lavabit?
Yeah, right. The US government would totally have shut down IBM (or Google, Microsoft, Apple... etc, etc, etc) for not co-operating with a law that probably wouldn't even stand up in court.
Re:Capitalism Democracy? (Score:4, Interesting)
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I assume you are responding to the part about "a law that probably wouldn't even stand up in court."
The court that issues these decisions (FISC) is not the court that decides what is Constitutional, FISC could very well be rubber-stamping warrants with little or none or the requirements for a proper warrant.
Fighting the decision to turn over data that law enforcement considers essential is not good business sense. The only lawsuits I am aware of are filed by individuals, EPIC, and ACLU.
Google could very w
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"The court that issues these decisions (FISC) is not the court that decides what is Constitutional..."
Yes, but since "The court's judges are appointed solely by the Supreme Court Chief Justice without confirmation or oversight by the U.S. Congress."(*), the court that *does* determine constitutionality isn't exactly unbiased towards FISC.
I don't know of another circumstance in which a court's judges are appointed by a single judge of the only court that could review the appointees' decisions. As well as tho
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This goes back a lot further than the Obama administration.
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This goes back a lot further than the Obama administration.
So what? Who started it or how long it's gone on means precisely zip, zero, nada, aside from identifying additional guilty parties for the exercise of justice.
He's the asshole supposedly in charge NOW, with the power to stop it NOW.
That excuse is a tactic used by a 6-yo to escape the consequences of and blame for bad behaviors, actions, & decisions.
Strat
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If people want to blame the NSA spying scandal on anyone, it should be Obama. He knew and approved of their actions. He should be held accountable.
And it's Congress' job to rein in the President. Congress won't rein in this president. They didn't rein in the previous one. They'll give a pass to the next one, too. Separation of powers was supposed to prevent one branch from "going rogue". That's broken now. Both parties have had opportunities in Congress to go after Presidents in the other party -- it hasn't happened, it's not gonna happen.
no, failure to disclose risk to owners is illegal (Score:2)
I'm afraid you're mistaken. They have a legal duty to inform owners (stockholders) and potential owners about any significant risks. Suppose I'm selling you some stock in my tiny software company. Suppose Microsoft has threatened to sue my company out of existence. Should I tell you about the impending lawsuit before you invest your savings in a business that is at risk? Of course I should, and the law requires that I do so.
The three questions are:
A) Did IBM executives know this posed a risk to
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I can't see how those claims will not be laughed out of a US court, the simple fact is that if you subtract $12B from the revenue IBM has made from the US government, the shareholder has received a consistent and healthy profit from the relationship for at
that's the question for the judge and jury (Score:3)
That's the question that will be before the judge and jury - did court orders, NSLs, etc. prohibit IBM from revealing more than they did about ALL of the risky cooperation? It may be that a vague disclosure as suggested by TFA would have hurt the business, and therefore stockholders. It may be that some of the data sharing wasn't covered by gag orders, or maybe all of it was. We don't have the necessary facts to know. You and I haven't seen the gag orders (yet). Maybe the executive's hands were tied ,
What sucks is that the idiot might be right (Score:4, Insightful)
He sounds like the crazy person who two years ago claimed that the government is tracking all of our emails and phone calls. He probably also believes Vince Foster didn't shoot himself in the back of the head and then drive to that park. That's what's so aggravating about this NSA stuff - it shows that sometimes crazy conspiracy theories are true.
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Reform? No idea what you're talking about.