Mark Hurd, the CEO of Hewlett-Packard Co. (NYSE:HPQ), was asked by the House Energy and Commerce Committee why he had exercised options and sold stock on the same day he was questioned by attorneys about the HP board spying scandal. Hurd must have known that the company would have to make public disclosures about the incident. He is also clearly bright enough to know that those revelations could move the stock price.
Mr. Hurd's response to the committee was that HP's lawyers told him that the sales were Okay. He said little, if anything, about the extent to which he applied his own reasoning abilities to the situation. Instead of saying that he was just following orders, he declared that he was just following advice.
It is an odd and hollow excuse that may well not satisfy the members of the House committee looking into the matter. It is not likely to close the matter for Mr. Hurd, either.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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