IBM's Ties to NSA Lead to Class Action Suit

Cooperation with PRISM resulted in stock price plunge once revealed

IBM hid its cooperation with the NSA's PRISM program, the disclosure of which by Edward Snowden caused China to "abruptly halt" sales and the stock price to plummet, investors claim in a class action.

The lawsuit, filed Thursday in Manhattan Federal Court, claims IBM touted itself as a market leader in the Asia-Pacific region when it knew that China "would not tolerate" its cooperation with the National Security Agency.

In June, former CIA contractor Snowden divulged the existence of PRISM, a top-secret electronic surveillance program that gives the NSA access to the servers of several major tech companies, including Google and IBM.