Mark Hurd Sex Scandal Leads to Insider Trading Accusations

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A Delaware court ruled on Wednesday that a letter written by Gloria Allred painting a portrait of former Hewlett-Packard head Mark Hurd as an executive who pressed a contract employee for sex may be made public.

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The letter, which was written by lawyer Gloria Allred to Hurt when he was still chief executive of Hewlett-Packard, set in motion internal investigations at the company that led to Hurd’s eventual resignation on August 6, 2010.

The eight-page letter accuses Hurd of sexual harassment, saying he repeatedly pressed Allred’s client, Jodie Fisher, a former actress in pornographic films and a reality show contestant, for sex. It also claims he boasted about his wealth and knowledge of business deals.

Hurt, now president of Oracle , fought to keep the letter private, asserting California’s privacy laws. But the court found that the letter, though “mildly embarrassing,” was not protected in the same way as trade secrets and certain financial information.

The letter says that Hurd met Fisher, who was working as a contract employee for Hewlett-Packard in Atlanta, in October 2007. On the pretext of showing her some documents for China’s vice premier, the letter says, Hurd invited Fisher to his room at the Ritz-Carlton, where he propositioned her.

“Ms. Fisher was horrified,” the letter says, and after an hour of refusals, she eventually left. “You told her that no one had ever rejected you before and were clearly miffed.” After describing several such encounters in detail, the letter says that Fisher’s employment with H-P ended.

Fisher settled with Hurd two days before his resignation from H-P. In a letter following the settlement, she stated that hte letter from Allred contained many inaccuracies.

“The letter was recanted by Ms. Fisher,” said Ken Glueck, a senior vice president at Oracle. “She admitted it was full of inaccuracies.” A spokeswoman for H-P declined to comment.

But H-P shareholder Ernesto Espinoza filed a lawsuit against the company and sought a copy of the letter in court to investigation corporate wrongdoing and waste associated with the relationship and Hurd’s resignation. While the Delaware court did not release the letter on Thursday, The New York Times obtained the documents from sources close to the case.

Shortly after receiving the letter from Allred, Hurd turned it over to corporate counsel who, acting on his behalf, began an internal investigation into Hurd’s behavior.

The letter was mostly a narrative of a powerful man’s pursuit of a woman for sex, but it also states that in March 2008, Hurd told Fisher he was working on a deal to purchase Electronic Data Systems . In May 2008, H-P announced that it would buy E.D.S. for $13.9 billion.

If the letter’s allegations are true, Hurd could be found guilty of leaking insider information, though sources close to the H-P board say the internal investigation proved no such transgression.

The Securities and Exchange Commission, citing commission policy, would not comment on whether the agency looked into the charge, but given the amount of time that has elapsed since the contents of the letter became known to several corporate lawyers and the government, it is unlikely that there was sufficient evidence for a case.

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To contact the reporter on this story: Emily Knapp at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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