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IBM reports that the SEC has stepped up their investigation of accounting and reporting irregularities regarding the expensing of stock options. Everyone who follows the stock knew that this is a possibility. The SEC usually needs to draw blood. IBM may throw them something just to get it over with.

The question becomes what kind of sanctions will occur. Multi-million dollar fines are chump change at Big Blue. Personally, I vote for a hang-em-high scenario where individuals (senior officers and advisors that they hide behind) are severely sanctioned and restricted from holding positions of power and influence in any areas dealing with the securities business and or investor relations/corporate finance for long periods of time. This will be the only way to deal with the arrogance of those who feel that they can get one by the marketplace.

IBM 1-yr chart:



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Source: SEC Investigating IBM On Accounting (IBM)