A U.S. appeals court has revived a lawsuit that alleges printing giant HP Inc defrauded shareholders by secretly using unprofitable tactics to boost sales of its printing supplies in 2015 and 2016.
HP Inc headquarters in Palo Alto, California
“The 9th U.S. Circuit Court of Appeals reversed a judge's ruling dismissing the lawsuit as filed too late,” said a report by Reuters. “Investors say they did not discover the alleged fraud until the U.S. Securities and Exchange Commission fined HP $6 million over its sales practice disclosures in September 2020.
“The SEC alleged in 2020 that some HP regional managers used incentives to accelerate sales they expected to materialize in later quarters. It also said sales managers sold steeply discounted supplies to distributors known to resell HP products outside their own territories, ‘cannibalizing’ sales from local distributors and violating company policy.”
The SEC said HP did not timely disclose to investors how these practices in 2015 and 2016 were reducing margins and boosting inventories at the Palo Alto, California-based technology company.
The lawsuit alleges HP and its top executives defrauded investors by hiding the impact of the practices until 2016.
HP Inc did not admit or deny the SEC’s findings.
