SEC Settles Charges Against HP for Misleading Disclosures Arising Out of Company’s Soap Opera Boardroom Leak Investigation

By Cydney Posner

The SEC has also posted a press release regarding its settlement of charges against Hewlett-Packard for failing to disclose the reasons for director Tom Perkins' resignation from the HP board in the midst of HP’s controversial investigation into boardroom leaks. The SEC found that, several months before public disclosure of the company’s controversial leak investigation, Perkins had objected to HP's handling of the matter and resigned. Nevertheless, the SEC contended that HP failed to disclose the reasons for his resignation as required by federal securities laws. The release states that federal securities laws require a "public company to disclose – by making a public filing with the Commission – the circumstances of the disagreement if a director resigns because of a disagreement with the company on any matter relating to its operations, policies or practices. Notwithstanding this requirement, HP did not make the mandated disclosures, instead reporting only the fact that Mr. Perkins had stepped down. The Commission found Mr. Perkins’ disagreement related to HP’s corporate governance and HP’s policies regarding the handling of sensitive information, and therefore was a disagreement related to HP’s operations, policies or practices which was required to be disclosed."

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