Class Action Suit Filed Against Hewlett-Packard over Autonomy Acquisition

FRT Admin
Site administrator
December 3, 2012

Hewlett-Packard (HP) was hit with a class action earlier this week for violations related to their acquisition of the software company Autonomy Corporation in 2011. According to the suit, HP concealed that their purchase of Autonomy was made on the basis of unreliable financial statements, wrought with serious accounting manipulations. The class action also claims that HP hid knowledge of their declining profit margins in their Enterprise Services business unit. Due to their misinformation, HP’s stock (HPQ) traded at artificially inflated prices, reaching a high of $28.89 in February, 2012.

Specifically the complaint alleges that HP was aware of, but did not disclose to the public, the following:

  • When HP acquired Autonomy, the company’s growth was due to a mischaracterization of sales of hardware products as software, and realized revenue for products of Autonomy’s customers that were not actually purchased
  • Even though HP had agreed in principle to acquire Autonomy, the company was examining ways to back out of the deal with knowledge of accounting irregularities in Autonomy’s financial statements
  • HP’s Enterprise Services’ operating margin had fallen from 10% to 3% between 2010 and April 2012.

HP Logo

The class period for the suit covers the period between August 19, 2011 and November 20, 2012, and owners of HP’s common stock during that time would be eligible as the suit is written currently.

The suit was filed by Robbins Geller Rudman & Dowd LLP, and is still accepting candidates for lead plaintiff. More detail on the suit can be found on the plaintiff’s counsel website. Any putative class member may move the Court to serve as lead plaintiff through counsel of their choice, or remain an absent class member by taking no action.

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