Court dismisses suit accusing HP and ex-CEO Hurd of fraud

Claims that vendor hushed up misconduct of former boss thrown out

A court has dismissed a lawsuit accusing HP and Mark Hurd of committing securities fraud in relation to the former chief executive's conduct.

The Retail, Wholesale and Department Store Union Local 338 Retirement Fund's complaint was originally thrown out last year, but an amended claim was subsequently made. The fund alleges that HP and Hurd conspired to dupe shareholders during the creation of its Standards of Business Conduct (SBC) code in 2006 and the policy's subsequent enforcement.

The suit, filed on behalf of those who bought stock between November 2007 and August 2010, claims that Hurd's own violations of the code were kept from shareholders. The CEO left under a cloud in 2010 after he was accused of fiddling the expenses and sexually harassing a contractor.

But district judge Jon Tigar of the US District Court North District of California has ruled that the plaintiff's claim "fails to adequately allege materiality and falsity", and thus the case has been dismissed for a second time.

HP implemented the SBC following a 2006 scandal which saw several senior executives leave after external operatives were hired to spy on staff in the name of identifying an information leak.

Fast-forward four years and the vendor was, once again, making headlines for unwelcome reasons. Hurd tendered his resignation in August 2006 after it was revealed allegations of sexual harassment against marketing contractor Jodie Fisher were being investigated.