- From IBM's Q2 10-Q: "In May 2013, IBM learned that the SEC is conducting an investigation into how IBM reports cloud revenue. IBM is cooperating with the SEC in this matter."
- No details are provided about the nature of the SEC's concerns. However, it's worth noting companies tend to receive payment for cloud software/services subscriptions up-front, and recognize this revenue over the life of the contract. The timing of such revenue recognition can present some accounting issues.
- It was only last week that a federal court approved a settlement between IBM and the SEC over Chinese/Korean bribery allegations. A DOJ bribery investigation remains outstanding.
- Shares -1.1% premarket.
at CNBC.com (Nov 18, 2014)