IBM becomes subject of SEC inquiry

[notiCIas]

IBM becomes subject of SEC inquiry

Regulators will scrutinize expensing of stock options by employees in 1Q, says computer maker.

June 27, 2005: 5:11 PM EDT

SAN FRANCISCO (Reuters) - IBM, the world's largest computer company, said Monday it is the subject of an informal probe by securities regulators tied to a controversy over its plan to expense employee stock options.

International Business Machines Corp. of Armonk, N.Y., disclosed the probe in a one-paragraph statement that said it had been informed by the Securities and Exchange Commission of an inquiry into the circumstances related to how it disclosed its options expense plan in April.

"The SEC has informed IBM that the informal investigation is not an indication that any violations of law have occurred," IBM said in the two-sentence statement.

An SEC spokesman declined to comment on IBM's statement.

IBM (Research) shares fell 1.2 percent in after-hours trading Monday after edging lower during regular trade to close at $73.88.