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Lawsuit accuses IBM of hiding China risks amid NSA spy scandal

13
Dec
2013

By Jonathan Stempel NEW YORK (Reuters) – IBM Corp has been sued by a shareholder who 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. IBM lobbied Congress hard to pass a law letting it share personal data of customers in China and elsewhere with the U.S. National Security Agency in a bid to protect its intellectual property rights, according to a complaint filed in the U.S. District Court in Manhattan. The plaintiff in the complaint, Louisiana Sheriffs Pension Relief Fund, said this threatened IBM hardware sales in China, particularly given a program known as Prism that let the NSA spy on that country through technology companies such as IBM. The Baton Rouge pension fund said the revelation of Prism and related disclosures by former NSA contractor Edward Snowden caused Chinese businesses and Chinas government to abruptly cut ties with the worlds largest technology services provider.

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