IBM is being sued by one of its shareholders over its alleged failure to disclose its involvement in the US National Security Agency's (NSA) spy program and subsequent loss of business.
According to Reuters, the Louisiana Sheriffs' Pension and Relief Fund is suing the technology giant's CEO Virginia Rometty and CFO Mark Loughridge for failing to reveal the risk of tying the company to the NSA.
In November, the Center for Strategic Studies in Washington noted that IBM, along with Cisco and Microsoft,by China in response to media reports that US companies were aiding the NSA.
IBM reported a 22 percent revenue loss from China in October, and a 4 percent drop in its Q3 profits. In September, Microsoft also noted that China is its weakest market.
In May this year, at the AusCERT conference and prior to the first reports of the NSA's spy program, retired US Marine Corps Lieutenant Colonel Bill Hagestad made the remark that if theescalated, it would have profound consequences for a company like Cisco.
"I predict that within five years, there's a little company in San Francisco Bay that will cease to exist because China, the biggest customer of Cisco, is going to pull it all out," he said at the time.
The NSA has been under fire for a number of controversial actions it has taken in the interests of collecting intelligence. These have included spying on theand presidents, at foreign embassies, creating malware that , breaking into and 's networks, and even .
Its operations have not been especially clean, either. Although it attempts to minimise spying on US persons, these rules are, or to check. Additionally, it has been found to be promising its allies that it won't spy on them, then behind closed doors, .