HP sued by shareholder; claims execs mislead investors

HP has not had a good past few weeks and now things just took on a new twist. Reuters reports that a shareholder in the company has filed a lawsuit against HP, claiming that the company's top management team hid the fact that its business model wasn't working. In August, HP announced that it would shut down its webOS hardware business, including its heavily hyped HP TouchPad tablet that ran on the webOS operating system.

Shareholder Richard Gammel claims in his proposed class action lawsuit, filed earlier this week in a U.S. District Court, that HP executives, such as CEO Leo Apotheker and CFO Cathie Lesjak, gave out positive statements about the company's financial health before August 18. That's when it revealed its shutdown of the TouchPad along with the fact that it was looking into alternatives for HP's PC business. If the class action lawsuit goes forward it will ask for damages for anyone who bought HP stock between November 22, 2010, and August 18. HP has yet to comment on the lawsuit.

HP has said it would prefer to spin off its its PC business into its own separate stand alone company so it can concentrate on its other business divisions. It is currently conducting a review of its PC unit and expects to make a final decision on the matter by the end of 2011. If it does decide to break off the PC business, HP has said it might take as long as 18 months to finally complete.

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