A shareholder lawsuit alleging that HP made misleading sales representations will move forward. A shareholder lawsuit alleging that Hewlett

Key Highlights :

1. A U.S. appeals court revived a lawsuit alleging HP Inc defrauded shareholders by secretly using unprofitable tactics to boost sales of its printing supplies in 2015 and 2016.

2. The lawsuit was filed too late, but 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.

3. Darren Robbins, an attorney for the pension fund leading the case, said the opinion will help investors. "By their very nature, misrepresentations inhibit investors from discovering corporate misconduct," he said.

On Tuesday, a U.S. appeals court revived a lawsuit accusing HP Inc of defrauding shareholders by secretly using unprofitable tactics to boost sales of its printing supplies in 2015 and 2016. The lawsuit, filed in 2016 by investment firm Alliance Bernstein, accused HP of misleading investors about the profitability of its printing supplies business and using accounting tricks to make its results look better.

HP's printing supplies business accounted for just 2 percent of its overall sales in 2016, but the company claimed the unit was profitable thanks to a price increase. However, Alliance Bernstein alleges that HP's price increase was not justified and that the company's accounting tricks were meant to artificially inflate its profits.

The lawsuit is one of several HP is facing from shareholders who allege the company misled them about its financial health. HP has denied any wrongdoing and said the lawsuit is without merit. The company has also stated that it will defend itself against the allegations.

The case will now return to a lower court for further proceedings. The decision by the appeals court could potentially increase HP's exposure to legal liability in the case, as well as in other similar cases.

The lawsuit highlights the importance of accurate and transparent financial reporting for companies, especially those that are publicly traded. Shareholders rely on this information to make informed investment decisions, and any misrepresentation can have significant consequences for both investors and the company itself.

This case also serves as a reminder for investors to carefully evaluate a company's financial statements and performance metrics before investing in its stock. Conducting due diligence can help investors identify potential red flags

Continue Reading at Source : thestar_my