Chief executive Mark Hurd is amongst those accused of insider
trading by selling shares as its spying scandal became public. A
lawsuit filed by investors alleges that executives used $6 billion
of company money to shore up the share price while they sold $41
million worth of personal shares.
The suit is being brought by a New York pension fund and
individual shareholders. Filed in September, the suit argued that
mismanagement of the scandal caused damage to the company. It has
been amended to reflect the new allegations against Hurd, chief
financial officer Bob Wayman and directors Lucille Salhany and
Lawrence Babbio.
"While defendants were causing HP to buy billions of dollars
worth of stock in the open market, defendants Hurd, Babbio,
Baskins, Salhany and Wayman sold more than $38 million worth of
stock back into the market," the lawsuit said.
The HP share price has remained more or less stable since the
news broke, but the lawsuit argues that this is because of the
massive buyback plan, which usually boosts a company's share price.
It says that the $11.7 billion of buybacks authorised by the board
this year dwarfs the $5 billion of stock it bought last year.
HP said that the law suit is "a transparent effort to exploit
issues related to HP's recent investigation for personal gain. HP
will defend itself vigorously."
The spy scandal centred on HP's attempts to find the source of
board level leaks to journalists. The company eventually gathered
information about board members' and journalists' phone calls
without their permission, physically tracked one journalist and
sent a journalist fake emails in an attempt to track email
traffic.
