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California company has lawsuit against it dismissed

On June 25, a judge dismissed with prejudice a lawsuit accusing Hewlett-Packard of securities fraud. The judge in the case had dismissed an earlier lawsuit in 2013 and rejected the current version after he still had concerns about it. Due to the fact that it was rejected with prejudice, it cannot be refiled.

The company had been accused of fraud because it had allegedly told shareholders that it was committed to ethics at the same time that its CEO had been reportedly committing sexual harassment. Due to the allegations that he had sexually harassed a female independent contractor, he resigned in 2010. An internal investigation revealed that he had not broken any sexual harassment laws, but he had filed inaccurate expense reports.

In his ruling in 2013, the judge in the case said the company's business standards statements were too broad and vague and that the plaintiff, Retail Wholesale & Department Store Union Local 338 Retirement Fund of Mineola, had not proven that a securities violation had occurred. Even after detailing the former CEO's misconduct, the judge ruled that there was still not enough evidence to prove that a securities violation may have taken place.

Misleading shareholders, engaging in insider trading or entering into contracts to inflate or attempt to inflate a stock's price can result in serious civil and potential criminal penalties. Shareholders who believe that they have been victimized by these types of actions may wish to speak with a business law attorney to determine whether any recourse is available to them. The attorney can help determine whether the client made an investment in reliance upon the alleged action.

Source: Reuters, " HP wins dismissal of lawsuit linked to ex-CEO Hurd's ouster", Jonathan Stempel, June 26, 2014

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