SEC Reportedly Investigating Hurd for Insider Trading
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 regarding kickbacks 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 announced.
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 dissatisfaction.
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 defense.
"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.