Hewlett-Packard Hit with Securities Fraud Class Action Lawsuit
By Michael Carlin
Hewlett-Packard (NYSE: HPQ) faces allegations that it knowingly published falsified financial reports of a recently acquired U.K. based software engineering company, Autonomy Corporation.
In August of last year, HP announced that it would be purchasing Autonomy for $10.2 billion. However, it announced a few weeks ago on November 20, 2102 that it would be taking $8.8 billion write-down on the acquisition because of Autonomy’s willfully inaccurate accounting reports. HP’s stock hit a 52 week low soon after it announced the news of Autonomy’s accounting improprieties.
Purchasers of HP securities from August 19, 2011 and November 20, 2012 are now suing HP in a class action securities fraud lawsuit. These investors can now apply to be appointed lead plaintiff of the claims until January 25, 2013. Plaintiffs with the largest investment losses in the class will be considered to lead the HP securities class action lawsuit.
The investors in the HP securities fraud lawsuit allege that HP’s executive officers violated U.S. securities law when they relied on reports of Autonomy’s historic growth and operations that contained fraudulent inaccuracies. The class action lawsuit alleges that Autonomy mischaracterized its sales and improperly recognized revenue. The investors point out that several independent reports called into question Autonomy’s accounting practices and investors argue that HP should have seen the red flags before it relied on Autonomy’s financial reports.
Autonomy co-founder Mike Lynch has publicly denied all claims of impropriety by Autonomy. Lynch says that HP’s $8.8 billion write down is actually the result of HP’s own mismanagement. Lynch also claims that HP’s allegations of fraudulent accounting by Autonomy came without warning as they did not even contact Lynch prior to making the public accusations. In response Lynch has requested that HP provide specific explanations for the allegations in a report, as well as any other documents that HP has provided to the U.S. and U.K. Securities enforcement bureaus.
Lynch also questioned the timing of HP’s allegations. Senior management apparently waited 6 months before informing their investors that something had gone wrong with the estimation of Autonomy’s value.
HP has responded that it plans to take legal action at the appropriate time.
The HP securities fraud class action lawsuit is being prosecuted by the law firm Newman Ferrarra LLP. The firm is encouraging individuals with information in this case to contact the firm. Individuals who expose corporate violations of securities laws are entitled to a portion of the recovery of damages in the lawsuit or settlement. Whistleblowers may receive as much as 30% of the recovery if they provide evidence that is relied upon to prosecute the claim.
If you invested in a company that committed stock fraud, securities fraud, or investment fraud an experienced Securities attorney can help you get the compensation you deserve. To learn more visit the Securities Fraud, Stock Fraud Investment Class Action Lawsuit Investigation.
Updated December 4th, 2012
All securities fraud class action and lawsuit news updates are listed in the Stocks & Securities section of Top Class Actions
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3 thoughts onHewlett-Packard Hit with Securities Fraud Class Action Lawsuit
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I had purchased HP stock during the time frame indicated in the claiment form and need to understand whether this claim is open, closed or under appeal. Please advise
I would like to inquire as to whether this lawsuit is still open, closed or under appeal. I did purchase stock from HP during the time frame indicated in the lawsuit but only recently was notified of possible actions required under the initial claim.Please advise.Thanks