HP Says SEC, New York Prosecutors Looking Into Compaq Vote

HP's last-minute moves to win support for the $19 billion Compaq deal are already under scrutiny in a lawsuit by dissident director Walter Hewlett. The lawsuit is set to go to trial next week in Delaware.

Though the proxies are still being counted, Hewlett wants a judge to order a new vote or disqualify the votes by Deutsche Bank, which he believes switched its position on 17 million shares out of fear HP would take future investment banking business elsewhere.

In addition to that case, the San Francisco office of the SEC is seeking documents and other information about HP's relationship and communications with Deutsche Bank, HP said in an SEC filing Monday.

HP says the SEC had noted that its request "should not be construed as an indication by the SEC or its staff that any violations of law have occurred."

Separately, federal prosecutors in New York subpoenaed HP on Wednesday for information about the voting by Deutsche Bank and Northern Trust, another large shareholder.

HP says the subpoena was in response to recent news accounts. That almost certainly includes last week's disclosure that two nights before the shareholder vote, HP CEO Carly Fiorina said in a voicemail to another top executive that "we may have to do something extraordinary for those two to bring them over the line here."

Officials at the SEC and the U.S. Attorney's Office did not immediately return calls seeking comment Monday.

HP, which claims to have won the Compaq vote by a slim margin, issued a statement Monday reiterating that it never acted improperly in lobbying investors.

Deutsche Bank has refused to comment. Northern Trust's investment arm has said it did not change its position on the Compaq deal in the final days.

A spokesman for Walter Hewlett declined to comment.

HP stock was up 10 cents, at $17.90, in midday trading on the New York Stock Exchange. Compaq was up 6 cents, at $10.04.

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