IBM announced that it has received notice of a formal, nonpublic investigation by the Securities and Exchange Commission concerning IBM's disclosures relating to IBM's first-quarter 2005 earnings and expensing of equity compensation.
The investigation involves an earning report IBM submitted on April 14, 2005. IBM indicated that it earned a first-quarter net income of 85 cents per share, an amount that was cut by 10 cents a share due to expenses for stock-based compensation.
As previously disclosed in June 2005, IBM has been cooperating with the SEC in an informal investigation of this matter, and will continue to do so. The SEC has informed IBM that the investigation should not be construed as an indication that any violations of law have occurred.
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