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HP victorious after lawsuit is dismissed

On Behalf of | Jul 3, 2014 | Commercial Litigation |

New Jersey investors may have heard that Hewlett-Packard Co was victorious in a securities fraud lawsuit. The plaintiffs were led by Retail Wholesale & Department Store Union Local 338 Retirement Fund. None of the parties involved in the trial offered any comments on the dismissal of the case. The plaintiffs claimed that HP committed securities fraud by misleading its shareholders about the company’s commitment to ethics while a chief executive was allegedly involved in a sexual harassment case.

The case was initially dismissed by a U.S District Court judge in August 2013.The same judge dismissed the revised version of the case with prejudice on June 25 since it failed to meet the concerns he expressed in 2013.

According to reports, HP modified the terms in its Standards of Business Conduct clause once a potential scandal about news leaks started to surface in 2006. The focal point of the lawsuit was a scandal involving an executive accused of harassing an independent consultant. He abruptly left HP in August 2010, while allegations concerning the sexual harassment began gaining momentum. An HP audit revealed that he inaccurately accounted for some expense reports, but he was ultimately cleared of any involvement with sexual harassment.

The plaintiffs in the shareholder dispute claimed that the company’s share price was inflated during the time of the executive’s malfeasance. In August 2013, the judge initially dismissed the case because he said the allegations were too vague to establish the defendant’s liability. In June, the judge noted that the revision had more detail, but that there was no securities law violation.

Source: Reuters, “HP wins dismissal of lawsuit linked to ex-CEO Hurd’s ouster”, Jonathan Stempel, June 26, 2014