A New York federal judge has dismissed a series of class action lawsuits against IBM dating back to 1992 when the company was incurring billions of dollars in restructuring charges and paying for a massive redundancy programme.
The lawsuits were filed following management comments during the first nine months of 1992 that despite the overall financial gloom there were no plans to dilute shareholders' quarterly dividends. But on 15 December that year IBM admitted it was uncertain that it could maintain its previously declared dividend, sending the stock price plummeting.
The class actions were filed the next day with shareholders arguing that IBM bosses had known by the start of October that there were likely to be problems sustaining the dividend.
But this week US District Judge Jed Rakoff issued a written declaration thowing out the claims, ruling that IBM had behaved properly and appopriately by making the 15 December announcement. "None of this remotely smacks of fraud," he wrote.
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