Wall Street Journal reports that the U.S. Security and Exchange Commission is investigating Mark Hurd for possible insider trading illegalities that allegedly took place in 2008.
Former Hewlett-Packard CEO Mark Hurd has been a regular magnet for legal controversy in 2010.
On Aug. 6, he was forced to resign at HP
following allegations of sexual harassment by an HP social-event
contractor and for falsifying reimbursement documents to cover up the
relationship. Hurd settled the sexual harassment case out of court;
he also settled the document problem with HP.
A few weeks after Hurd's unexpected departure at HP, a number of
shareholders sued Hurd and the company for fiduciary malfeasance when
the stock price suddenly took a nosedive. Those cases are pending.
Then, one day after Hurd was hired as co-president of Oracle on Sept. 6, HP brought a civil lawsuit against Hurd
for breaking a severance agreement in joining one of its most powerful
competitors so soon after taking a $40 million severance package. Hurd
and HP settled 13 days later.
On Oct. 22, Hurd and several other HP executives were sued by a Midwest-based pension fund
he and others are alleged to have paid to key influencers
to earn business for HP. That one also is pending.
Now, in the latest episode of this Silicon Valley soap opera, the Wall
Street Journal reported Dec. 20 that the U.S. Security and Exchange
Commission is investigating Hurd for possible insider trading
illegalities that allegedly took place in 2008, just before HP acquired
IT consultancy Electronic Data Systems for $14 billion.
As part of the investigation, the Journal said, the SEC is examining
allegations that Hurd gave inside information about HP's then-pending
acquisition of EDS to a former contractor in 2008 before the deal was
The probe is also trying to find out if Hurd destroyed evidence related to his August departure from HP, the Journal said.
Investigation only, no charges filed
To be clear here: This is simply an investigation by a government
regulatory agency. No charges have been filed against Hurd, and the
investigation may amount to nothing at all.
However, the pressure and media attention that come alongside a federal
investigation -- especially one involving a president of a company as
large and complicated as Oracle -- could easily stir up stockholder
Questioned by eWEEK about this, Oracle Corporate Director of
Communications Deborah Hellinger said the company would have no comment
on the SEC investigation.
HP spokesperson Gina Tyler told eWEEK only that "HP is cooperating fully with the SEC on its investigation."
Hurd has selected high-powered legal help, commissioning O'Melveny and
Meyers white-collar-crime defense attorney Daniel Bookin to handle his
"Mark acted properly in all respects," Hurd spokesman Glenn Bunting
told The Journal. "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 replaced Carly Fiorina as HP's CEO in 2005, coming from NCR.
He has been highly regarded for his performance in elevating HP to
become the world's highest-revenue IT systems and service provider.