Just when you thought the Hewlett-Packard drama had died down, regulators have begun investigating the circumstances surrounding Mark Hurd’s sudden departure as president and CEO of HP.
The Wall Street Journal first reported the Securities and Exchange Commission’s probe. The Journal cited anonymous sources saying the SEC is investigating claims that Hurd shared insider information with an ex-contractor before the company acquired Electronic Data Systems for $13.9 billion in 2008.
Hurd resigned suddenly in the wake of an investigation into his relationship with a former actress named Jodie Fisher, who accused Hurd of sexual harassment. A company investigation cleared Hurd of any wrongdoing with Fischer, but Hurd resigned, saying there were instances in which he “did not live up to the standards and principles of trust, respect and integrity” that he espoused at HP. Hurd is now a president at Oracle.
A Busy SEC
The SEC’s investigation doesn’t surprise Charles King, principal analyst at Pund-IT. Between Hurd’s original $40 million sweetheart deal — later reduced after shareholders screamed bloody murder — and several resulting investor lawsuits, there’s plenty for the SEC to investigate, he said.
“Additionally, as the melodrama around HP, Hurd and Jodie Fisher was spinning out, one rumor that appeared late in the day was that Hurd had spoken out of school to Fisher about the then-in-progress EDS acquisition,” King said. “Such allegations are far more serious than the harassment and expense fudging Hurd was accused of, and, if correct, would be a natural target for the SEC.”
No Worries for Shareholders
What about HP clients and shareholders? Should they be concerned? King doesn’t think so, but then again it depends on whom or on what the probe focuses.
If the primary target is Hurd and allegations about leaking information about the EDS deal, King said, the company can note that it acted quickly and…