The executives at the head of scandal-hit computer maker Hewlett-Packard have been accused of profiting from the company's woes. Senior staff are accused of selling shares in the firm as news of its spying scandal broke.
Chief executive Mark Hurd is amongst those accused of insider trading by selling shares as its spying scandal became public. A lawsuit filed by investors alleges that executives used $6 billion of company money to shore up the share price while they sold $41 million worth of personal shares.
The suit is being brought by a New York pension fund and individual shareholders. Filed in September, the suit argued that mismanagement of the scandal caused damage to the company. It has been amended to reflect the new allegations against Hurd, chief financial officer Bob Wayman and directors Lucille Salhany and Lawrence Babbio.
"While defendants were causing HP to buy billions of dollars worth of stock in the open market, defendants Hurd, Babbio, Baskins, Salhany and Wayman sold more than $38 million worth of stock back into the market," the lawsuit said.
The HP share price has remained more or less stable since the news broke, but the lawsuit argues that this is because of the massive buyback plan, which usually boosts a company's share price. It says that the $11.7 billion of buybacks authorised by the board this year dwarfs the $5 billion of stock it bought last year.
HP said that the law suit is "a transparent effort to exploit issues related to HP's recent investigation for personal gain. HP will defend itself vigorously."
The spy scandal centred on HP's attempts to find the source of board level leaks to journalists. The company eventually gathered information about board members' and journalists' phone calls without their permission, physically tracked one journalist and sent a journalist fake emails in an attempt to track email traffic.