HP sued by shareholder over claims of misleading investors

Summary:Hewlett-Packard boasted about the expected success of the HP TouchPad ahead of its release as most manufacturers do about their products. But now that has at least one shareholder steaming mad.

Hewlett-Packard is being sued by one of its shareholders following the sudden dismissal of webOS and the HP TouchPad in August.

Specifically, Reuters reports that shareholder Richard Gammel is accusing HP of covering up and not admitting to investors that webOS wasn't actually central to the business model of the company anymore even while it was building up the HP TouchPad.

The suit also claims that HP executives -- especially CEO Leo Apotheker and CFO Cathie Lesjak -- of making positive statements about the state of HP that "later proved unfounded."

Now, all executives try to sound positive to investors so as not to stir things up and scare them away. Additionally, it's only natural in business to boast about and promote products before their releases to gain interest. Just look at RIM trying to save face and tout the BlackBerry 7 smartphone series (and even the PlayBook) today.

But if HP's leaders were flat out lying about the corporation's financial well-being, then that's a major problem -- as would if it was discovered that HP was planning to jettison webOS before the TouchPad even launched.

Nevertheless, if Gammel succeeds and proves that HP was negligent and dishonest with its investors, then damages would be awarded to anyone that bought HP shares between November 22, 2010, and August 18, 2011 -- the same day that HP gave up on webOS and its related products.

Related:

Topics: Hewlett-Packard, Banking

About

Rachel King is a staff writer for CBS Interactive based in San Francisco, covering business and enterprise technology for ZDNet, CNET and SmartPlanet. She has previously worked for The Business Insider, FastCompany.com, CNN's San Francisco bureau and the U.S. Department of State. Rachel has also written for MainStreet.com, Irish Americ... Full Bio

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