December 21, 2010

SEC Investigates Forced Resignation Of Hewlett-Packard CEO

The Securities and Exchange Commission (SEC) is investigating the circumstances of Mark Hurd's forced resignation of the world's biggest personal computer and printer maker.

Hurd's exit as CEO lead Hewlett-Packard to an immediate $9 billion drop in market value and involved allegations of sexual harassment and inappropriate sharing of inside information.

HP said on Monday that it is cooperating with the investigation.

"Mark acted properly in all respects," David Satterfield, a spokesman for Hurd, said in a statement. "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 HP's stock."

Hurd's five-year reign at HP came to an abrupt end after a former HP marketing contractor, Jodie Fisher, accused him of sexual harassment.

HP's board said that it did not find evidence to support the harassment claim, but did find inaccuracies in Hurd's expense reports for his outings with Fisher, who helped organize and host HP networking events that Hurd attended.

The Wall Street Journal reported that the SEC's investigation is looking at the expense reports, as well as Fisher's allegations and the possibility that Hurd destroyed computer evidence related to the case.

Hurd argued that he did not prepare his own expense reports, and that the omission of Fisher's name from some reports was not intentional.

Fisher later retracted her claim that Hurd disclosed sensitive information, saying there were "many inaccuracies" in her original story.

A person familiar with the situation told The Associated Press on Monday that the computer issue involved information the SEC requested concerning an HP computer that Hurd kept at home and had digitally cleaned before returning it to the company.

AP reported that the cleaning was done to protect the privacy of Hurd's family, which used the computer for things like photos and music.

Hurd received a $12.2 million cash payout and exercised options to sell off about $30 million worth of HP stock.

HP's market value dropped about $9 billion in the stocks' first day of trading after the August 6 resignation. 

Leo Apotheker, the former CEO of business software maker SAP AG, replaced Hurd and has appeared to have calmed investors' nerves by promising to focus on software and research.


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