Congressmen question HP chief's stock sale
Two Michigan Democrats want Mark Hurd to explain why he sold stock just before HP's controversial spying operation became public.
In a letter sent Tuesday to Hurd, Reps. Bart Stupak and John Dingell, both Michigan Democrats, asked the CEO why he sold $1.4 million worth of stock options on August 25, the same day he was questioned by HP attorneys about the company's investigation into news leaks.
The congressmen note in their letter that the sale did not seem to be part of a scheduled stock sale. Executives often arrange in advance to sell stock, and the timing of such transactions typically follows a pattern.
"The August 25 transaction does not appear to be part of any prescheduled program," the congressmen wrote to Hurd. "The chart indicates that you exercised options and cashed them out on the same day."
Dingell and Stupak are members of the House Committee on Energy and Commerce's Subcommittee on Oversight and Investigations, which held a hearing in September into HP's internal investigation. Hurd was one of several people to appear before that committee.
HP has acknowledged obtaining the private phone records of journalists, company board members and employees in an effort to uncover a news leak within the company.
During the September hearing, Hurd told Congress that he approved of many of the tactics used by HP investigators, but denied having prior knowledge of a tactic known as pretexting, the term used to describe obtaining records through the use of false pretenses.
Five people involved in HP's leak hunt have been charged with four felonies, including identity theft and conspiracy. Hurd is not among that group.
An HP representative declined to answer specific questions related to the timing of Hurd's stock sale, but said that "this is not a new matter. We look forward to responding to the committee's inquiry."
However, HP has dismissed as "baseless" a shareholder lawsuit making similar insider-trading allegations that was filed against the company last month.
Hurd also came under questioning for stock sales at his prior company, NCR, that took place shortly before he took the HP job. Hurd made $2.3 million by selling NCR stock in the two months prior to being named HP's CEO. An HP representative said in April 2005 that the sales came before Hurd was contacted about the CEO's job and that there had been no impropriety.