Hurd's HP Exit Gets SEC Scrutiny

The government agency wants to know if HP's former CEO Mark Hurd shared insider information before he was forced to leave the company.


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Posted December 21, 2010

David Needle

Just when you thought the "HP CEO Resigns Amid Controversy" story had run its course, it looks like another chapter is being written. Today the Wall Street Journal reported that the Securities and Exchange Commission (SEC) is investigating claims that Hurd may have shared information about HP's (NYSE: HPQ) pending $13.9 billion acquisition of Electronic Data Systems back in 2008.

SEC officials are allegedly looking into whether Hurd shared information on the EDS deal with Jodie Fisher, an HP contractor who served as hostess at various sales events. HP cleared Hurd of a sexual harassment claim by Fisher, but cited his filing false expense reports related to Fisher's work (including what the WSJ said were expense claims for events that never took place) as among the reasons he was forced to leave the computer giant this past August.

"HP is cooperating fully with the SEC on its investigation," an HP spokesperson told InternetNews.com in an email which said the company would have no further comment on the matter. It is not known what other issues the SEC may be looking into or how far along the investigation is.

The WSJ quoted Glenn Bunting, a spokesman for Hurd, as saying "Mark acted properly in all respects. It is understandable that the SEC is looking into the events surrounding Mark's departure, which was followed by a precipitous drop in the value of H-P's stock. In a separate blog post, the WSJ estimates HP's stock has lost $9.5 billion in market value since Hurd left, though the blog also cites other factors contributing to the drop.

Shortly after leaving HP, Hurd joined Oracle (NASDAQ: ORCL) as co-President. But that move also proved controversial as HP quickly filed a lawsuit claiming Hurd's appointment threatened to reveal trade secrets to Oracle, a once close ally of the company. The suit was eventually settled. The relationship between the two computer giants has become more adversarial following Oracle's acquisition of Sun Microsystems and its transformation to more of a complete systems supplier that competes directly with the likes of HP and IBM (NYSE: IBM).

Separately, HP is facing civil lawsuits by shareholders against the company and its board of directors related to Hurd's departure, which initially included an exit package worth more than $35 million, though that amount is believed to have been reduced as part of his settlement with HP over his move to join Oracle.

David Needle is the West Coast bureau chief at InternetNews.com, the news service of Internet.com, the network for technology professionals.

Tags: Oracle, HP, SEC, Mark Hurd

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