Description: It isn’t often that big blue gets a black eye. But on Friday IBM (IBM.N), the leading U.S. technology firm known for its conservative management, found itself entangled in the largest ever hedge fund insider-trading scheme involving Galleon Group founder Raj Rajaratnam.
Keys: Capital budgeting decisons (p311), Stock market (p281)
Questions for discussion:
- How do you think this scandal might affect these firmsâ€™s stock value in the near and long term? Explain your answer.
- Do you expect this to affect capital budgeting decisions by current or potential customers? Explain your answer.