Congress Probes HP CEO's Stock TradesCongress Probes HP CEO's Stock Trades

Members of Congress have asked Hewlett-Packard CEO and president Mark Hurd for information about $1.37 million worth of shares that he appeared to cash in the same day lawyers questioned him about the company's pretexting scandal.

Members of the House Committee on Energy and Commerce's Subcommittee on Oversight and Investigations sent a letter to Hurd as well as to the U.S. Securities and Exchange Commission in December seeking an explanation. Hurd's response was due more than two weeks ago, but the committee hasn't released a response or commented on the status of the inquiry. HP didn't immediately respond to a request for comment.

The letter, from U.S. Reps. John Dingell and Bart Stupak, states that members of the committee held hearings to determine how much HP management knew about deception used during an investigation into the company's board leaks, when they knew it, and what actions they took in response. It noted that Hurd's trade occurred the same day Wilson Sonsini attorneys questioned him about HP's investigation. It was also before the company filed SEC documents disclosing "the circumstances surrounding the resignation of Thomas Perkins from the board of directors and the controversial methods used to obtain phone records and other sensitive information on HP insiders and members of the press," the letter states.

Dingell and Stupak said Hurd's transaction doesn't appear to be part of any prescheduled program and records indicate he exercised options and cashed them out on the same day. They requested confirmation that the records were accurate and asked Hurd to provide a reason behind his transaction.

"Continuing revelations about widespread 'backdating' and 'spring loading' abuses have raised questions about whether executives are cashing in ('bullet dodging') while in possession of potentially damaging material facts that shareholders do not know," the inquiry notes. "Please state whether this is or is not the case with your transaction, and further please inform us whether any other HP officers or directors engaged in similar transactions during this period."

A shareholders' lawsuit filed in Santa Clara County, Calif., alleges that executives unfairly cashed in on the knowledge that damaging information would soon be publicized. However, HP weathered the scandal with little impact on its stock price.