U.S. Lawmakers Question HP CEO's Stock Sale Timing
Two U.S. lawmakers have questioned the timing of Hewlett-Packard Chief Executive Officer Mark Hurd's exercise and sale of $1.37 million in stock options on the day he was interviewed by attorneys hired to review the company's leak investigation.
In a Dec. 12 letter to Hurd, released Wednesday, two Democratic members of the House Energy and Commerce Committee asked if the sale was part of a prescheduled program, saying a chart turned over to the panel suggested the sale on Aug. 25 was not part of a prearranged plan.
"Please state whether the chart is accurate. If it is accurate, please explain the reason for this transaction," said Michigan Reps. John Dingell and Bart Stupak.
An HP representative could not be reached immediately for comment.
Next month, Dingell will become chairman of the Energy and Commerce Committee and Stupak is expected to lead the panel's subcommittee on oversight and investigations.
Hewlett Packard in 2005 began investigating who at the company was leaking sensitive information and earlier this year admitted its investigators used false identities to obtain telephone records of directors, employees and journalists.
The computer and printer maker hired the law firm Wilson Sonsini Goodrich & Rosati to report on how it handled the investigation. Attorneys at the firm questioned Hurd the day his options were sold, the lawmakers said.
The lawmakers said there have been continuing revelations of executives at companies manipulating stock options, raising questions "about whether executives are cashing in while in possession of potentially damaging material facts that shareholders do not know," their letter said.
Hurd, other directors and senior executives were sued last month for selling about $41.3 million of HP stock in the two-and-a-half weeks preceding HP's disclosure that investigators working on its behalf used false pretenses to obtain private phone records.
HP called that lawsuit "baseless".