The S.E.C. has launched an investigation of Mark Hurd's resignation as CEO of Hewett-Packard, The Wall Street Journal reports. Hurd's surprise departure in August, not long after a female contractor filed a sexual harassment complaint against him, transpired in a fog of uncertainty. Why did HP's board of directors ask Hurd--often lauded as a highly competent corporate chief--to step down, many asked, especially after an internal investigation concluded that Hurd didn't violate the company's sexual harassment policy? Then, in September, a settled lawsuit allowed Hurd to become co-president of rival Oracle, a move HP had long attempted to stonewall in an effort to protect its trade secrets. It appeared the month-long corporate drama was winding down.

Turns out the saga is far from over: now, federal regulators want to see whether Hurd, while CEO, shared sensitive information about HP's $13.9 billion acquisition of a technology-consulting company with Jodie Fisher, the former HP event hostess who lodged the sexual harassment complaint against Hurd. The SEC will also look into Hurd's handling of expense reports in connection with Fisher.

What should we make of the SEC's probe?

  • The Investigation May Amount to Nothing, says Eric Savitz at Forbes. It’s difficult to see how HP faces liability, he says, and, while Hurd could be more vulnerable, it's unlikely that he'll be accused of insider trading if nobody traded on the information he leaked (Fisher has denied doing so). "Don’t be surprised if nothing happens," Savitz concludes, "or if Hurd settles without endangering the security of his new gig at Oracle."
  • Even If Nothing Happens, There Could Be Stock Problems, notes Chris Preimesberger at Eweek: "The pressure and media attention that come alongside a federal investigation--especially one involving a president of a company as large and complicated as Oracle--could easily stir up stockholder dissatisfaction."
  • HP Is Cooperating with the SEC? No Kidding! asserts Nick Farrell at TechEye. Given the bad blood between HP and Oracle, he explains, "we would have thought that if HP was sitting on any evidence of [Hurd's] wrong doing, it would be a little happier to turn it over to the SEC investigators."
  • Is Hurd Worth $9.5 Billion to HP? asks Shira Ovide at The Wall Street Journalm, looking over news stories with this latest development. $9.5 million is how much market value the firm has lost since Hurd left. Thus, Ovide poitns out, "there is some truth to the Mark Hurd is awesome line." Ovide notes that while HP's stock price followed the S&P 500 in the lead-up to Hurd's resignation, it's now entirely off track:
Don't forget that Hurd was well liked on Wall Street for his nerdy devotion to financial metrics numbers and cost cutting–the same qualities that made him not so popular among the H-P rank-and-file. No one man is worth $9.5 billion, but would the departure of current CEO Leo Apotheker be met with the same stock reaction? Doubt it.