Business

Former HP chief hits ‘Escape’ on fraud suit

Hewlett-Packard and its former chief executive, Mark Hurd, won the dismissal of a securities-fraud lawsuit that alleged the computer maker didn’t abide by its standards of business conduct as Hurd allegedly engaged in sexual harassment.

A US federal judge found HP’s ethics statements were too vague.

Hurd resigned in 2010 as CEO amid allegations that he had sexually harassed an independent consultant, and his departure resulted in a steep stock drop.

HP had amended its standards of business conduct in 2008 after an earlier ethics scandal arising out of information leaks that implicated several executives and directors. The complaint alleged that Hurd’s reputation for integrity was a material factor in the company’s success following that scandal.

Shareholders alleged the HP’s standards of business conduct obligated Hurd to disclose any conduct that violated these ethics. The complaint also alleged Hurd’s violation of the standards constituted a material omission, thereby violating securities laws.

Stock closed at $26.74, down 3 cents, yesterday.