Updated: June 3 / 2019
On Monday, the U.S. Supreme Court agreed to decide whether or not the managers of a retirement fund for IBM Corp employees who have invested in the company’s stock can be sued for failing to disclose that its microelectronics business was overvalued.
The court will hear an appeal by IBM’s retirement plan of a lower court ruling that allowed the litigation to proceed. IBM is not a defendant in the case.
The U.S. Chamber of Commerce, which is the American business community’s most significant lobbying arm, has begged the Supreme Court briefly to hear the case, claiming a ruling against the fund could prevent companies from offering retirement plans that invest in company stock. Thousands of companies nationwide offer those types of programs.
Participants in the IBM retirement plan have mentioned that in 2013 the company’s microelectronics division were suffering losses even though IBM stated at the time it was valued at $2 billion.
The accusers in the case have said the Retirement Plans Committee of IBM, which oversees the fund, had known or should have known that the business was overvalued. The committee’s members included senior IBM executives.
The Supreme Court will be hearing arguments and issue a ruling in its next term, which will start in October 2019.