HP LAWSUIT ADDS INSIDER TRADING CLAIMS

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HP LAWSUIT ADDS INSIDER TRADING CLAIMS

 user 2006-11-30 at 12:19:00 pm Views: 48
  • #16965

    HP Lawsuit Adds Insider Trading Claims
    SAN
    JOSE, Calif. (Nov. 06) – A shareholder lawsuit over Hewlett-Packard
    Co.’s ill-fated boardroom spying probe added claims of insider trading
    on Wednesday, alleging that executives sold millions of dollars in
    stock just before the scandal broke.The lawsuit, filed in Santa Clara
    County Superior Court on behalf of all HP shareholders, amended a
    September claim accusing the top brass at HP of breaching their
    fiduciary duties and causing substantial harm to the company.It also
    consolidated other existing lawsuits within California over the
    media-leak probe at HP that led to criminal charges against former
    Chairwoman Patricia Dunn, former ethics chief Kevin Hunsaker and three
    private detectives – Ronald DeLia, Matthew DePante and Bryan Wagner.The
    new filing accuses CEO Mark Hurd and seven other executives of unfairly
    enriching themselves by selling HP stock worth $41.3 million during the
    two weeks prior to the scandal becoming public in early September.It
    was the busiest period of stock sales by top HP insiders in five years,
    according to the lawsuit. Most of the sales involved cashing out stock
    options.

    HP has said the sales were proper.
    The lawsuit
    claims executives sold on fears that investors would punish the
    computer and printer maker upon learning of the dicey tactics used to
    unmask the source of boardroom leaks to reporters. The tactic, known as
    “pretexting,” involved investigators impersonating directors and
    journalists to obtain confidential phone records.The “defendants knew
    that the market’s perception of HP would be significantly damaged when
    (not if) the market became aware of the full extent of distrust and
    acrimony among Board members, the outlandish smear campaign tactics the
    acrimony had spurned, and the illegality of the investigatory tactics
    being utilized,” the lawsuit said.The lawsuit, which seeks unspecified
    damages, also claims HP wasted corporate assets and initiated a $6
    billion stock buyback in August “to prevent a free-fall in the
    Company’s stock price as the news of the defendants’ misconduct reached
    the market.”HP said in a statement that the lawsuit was baseless and
    “represents a transparent effort to exploit issues related to HP’s
    recent investigation for personal gain at the expense of HP, its
    shareholders and its employees. HP will defend itself vigorously.”HP’s
    stock price actually has gone up since the investigation was revealed
    in a regulatory filing, rising about 8 percent to close Wednesday at
    $39.39 on the New York Stock Exchange.