HP LAWSUIT ADDS INSIDER TRADING CLAIMS

[Anonymous]

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.

[Author]

November 30, 2006 at 12:19 PM