Baptism of fire for Palmisano
Shares in IBM were down almost 5 per cent yesterday as it emerged that the US Securities and Exchange Commission was investigating the company's accounting practices.
Various sources report the SEC started to take an interest following a New York Times story on 15 February. A profits warning - the first in over 10 years - sent IBM shares 10 per cent lower on Monday and the latest revelation saw the stock drop to $84.30, down 4.7 per cent.
The developments mark an uncomfortable first few weeks in the CEO post for Sam Palmisano.
However, by the end of yesterday the news was that the SEC had indeed opened an inquiry into Big Blue but that it had soon halted its investigation.
IBM is far from the only high-tech player to full under the SEC's microscope. Several telcos are under investigation, so too Symbol Technologies and several investment banks including Merrill Lynch.
Yesterday document management stalwart Xerox paid a $10m civil penalty after the SEC found it used "accounting tricks" between 1997 and 2000.