HP probe scandal shifts to alleged stock fraud
Palo Alto (CA) - Just when the dust had finally settled from the big scandal earlier this year, when HP executives were accused of spying on journalists, there are new claims of ethical violations, as records show that executives cashed in their stocks during the fiasco, trying to avoid a dip in stock price, according to a story by the San Francisco Chronicle.
A lawsuit has been filed by several shareholders, as well as a New York pension fund, accusing a handful of top level HP executives, including CEO Mark Hurd and even company lawyer Ann Baskins, of insider trading.
Also implicated in the suit are CFO Bob Wayman and board directors Lucille Salhany and Lawrence Babbio, as well as former chairperson Patricia Dunn. The allegations state that, as a result of knowing about the scandal, they sold off large chunks of stock, fearing that news of the unethical and potentially illegal probe would cause the price to fall.
"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," claims the lawsuit.
The scandal dates back to September, when news broke about HP execs accessing records and personal data from journalists in an attempt to find out who has been leaking information from confidential board meetings. In addition to a bevy of bad publicity, the fiasco led to a corporate reshuffle as HP tried to bring back an impression of integrity to the company.
HP denies the allegations of these same executives exploiting the situation for personal gain. In a statement, the company said the "lawsuit 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."