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To: 2MAR$ who wrote (48351)	4/11/2002 11:36:36 AM
From: 2MAR$	Read Replies (1) \| Respond to of 208838

=DJ IBM Down -3: SEC Insight President Confirms Report Reached later SEC Insight president John Gavin confirmed in an e-mail that it did publish a report on IBM Thursday indicating that the SEC started a preliminary inquiry of the company on Feb. 15. While Gavin said he doesn't know what the inquiry is about, he said it does appear that it's "unrelated to a long-running investigation of the company, as that probe actually ended on February 13, 2002." Still, Gavin did note that the preliminary SEC inquiry was launched on the same day that the New York Times published a piece on IBM's accounting and disclosure practices. The New York Time report revealed that IBM quietly sold its optical transceiver unit for a $280 million gain on the last day of 2001, helping it meet analysts' earnings expectations. News of the sale sent the stock free falling and prompted Big Blue to implement new accounting polices. For instance, in its recently filed 2001 annual report IBM began separately reporting such gains, citing a desire to meet investor demand for more complete disclosure. Late last month, The Wall Street Journal reported that the SEC asked IBM two years ago to consider amending its 1999 annual report. The SEC request, which came in a series of letter sent to IBM by the agency's Division of Corporation Finance, questioned a number of IBM's accounting and disclosure practices, including the way it booked a $4.06 billion gain from an asset sale and whether the company had told investors enough about the extent to which pension fund gains contributed to its bottom line. Earlier this week IBM rocked the financial markets when it issued an earnings warning for the first time in over a decade and only the third time in the company's history. Citing a "very tough" business environment, IBM said Monday that it expects revenue to be $18.4 billion to $18.6 billion for its first quarter, compared with an analyst consensus for revenue of $19.65 billion. Big Blue targeted earnings of 66 cents to 70 cents a share, compared with the expectation of earnings of 85 cents. Shares of IBM continued to fall Thursday, recently setting a 52-week low of $83.50. The stock is 34% off its 52-week high of $126.39, reached Jan. 9. -By Donna Fuscaldo; Dow Jones Newswires; 201-938-5253; donna.fuscaldo@dowjones.com (END) DOW JONES NEWS 04-11-02