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1 KESSLER TOPAZ MELTZER & CHECK, LLP 2 RAMZI ABADOU (Bar No. 222567) ELI R. GREENSTEIN (Bar No. 217945) 3 STACEY M. KAPLAN (Bar No. 241989) PAUL A. BREUCOP (Bar No. 278807) 4 IOANA A. BROOKS (Bar No. 253123) One Sansome Street, Suite 1850 5 San Francisco, CA 94104 Tel: (415) 400-3000 6 Fax: (415) 400-3001 [email protected] 7 [email protected] [email protected] 8 [email protected] [email protected] 9 Counsel for Lead Plaintiff PGGM Vermogensbeheer B . V. 10 and Lead Counsel for the Class 11 UNITED STATES DISTRICT COURT 12 NORTHERN DISTRICT OF CALIFORNIA 13 SAN FRANCISCO DIVISION 14 IN RE HP SECURITIES LITIGATION, Master File No. C-12-5980 CRB 15 CLASS ACTION 16 This Document Relates To: All Actions CONSOLIDATED COMPLAINT FOR 17 VIOLATION OF THE FEDERAL SECURITIES LAWS 18 DEMAND FOR JURY TRIAL 19
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1 TABLE OF CONTENTS
2 I. INTRODUCTION...... 1
3 II. SUBSTANTIVE ALLEGATIONS AND DEFENDANTS’ MOTIVES ...... 3
4 A. Background to the Class Period ...... 5
5 1. A Brief History of HP’s High-Level Corporate Leaks ...... 5 6 2. Red Flags Are Raised About Autonomy Before the Class Period...... 7 7 3. HP Hires a New CEO Desperate to Transform HP Into a 8 SoftwareCompany ...... 12
9 4. Apotheker and Lynch Agree to a Deal-In-Principle ...... 15 10 5. HP Conducts Cursory Due Diligence on a Polluted and Vastly Overvalued Asset ...... 18 11 B. The Class Period Starts with Apotheker’s Announcement of HP’s 12 Offer to Purchase Autonomy ...... 21 13 1. More Suspicions Emerge About Autonomy’s Improper Course of Business Conduct ...... 23 14 2. Apotheker Responds to Investors’ Unease About HP’s 15 Offerfor Autonomy ...... 29
16 3. The Briody Matter ...... 31 17 C. Unbeknownst to HP’s Shareowners, HP Sought to Withdraw the AutonomyOffer ...... 33 18 D. HP Begins to Unwind Autonomy’s Improper Accounting Practices ...... 36 19 E. A Fourth Whistleblower Alerts HP About Autonomy ...... 38 20 F. The Relevant Truth Is Mostly Revealed, Thereby Ending the Class 21 Period...... 40
22 G. Relevant Post Class Period Developments ...... 43 23 1. HP/Autonomy Defends Autonomy’s Accounting Practices inNew Hampshire ...... 46 24 2. Lynch and Apotheker Respond to HP’s Accusations ...... 48 25 III. JURISDICTION AND VENUE ...... 51 26 IV. THEPARTIES ...... 51 27 A. Lead Plaintiff ...... 51 28
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1 B. Corporate “Person” ...... 52
2 C. Insider Defendants ...... 52
3 V DEFENDANTS’ VIOLATIONS OF THE EXCHANGE ACT ...... 57 4 A. HP’s Quantitative Financial Statements Were Materially Misstated
in Violation of GAAP and SEC Regulations ...... 57 5
1. Applicable Accounting and Disclosure Rules ...... 57 6
2. Summary of HP’s Accounting Violations ...... 60 7 a. HP’s 4Q11 and FY 2011 Financial Statements
8 ViolatedGAAP ...... 64
9 b. HP’s 1Q12 Financial Statements Violated GAAP ...... 67
10 c. HP’s 2Q12 Financial Statements Violated GAAP ...... 68
11 d. HP’s 3Q12 Financial Statements Violated GAAP ...... 69 12 3. HP/Autonomy’s Financial Misrepresentations Were
Material...... 70 13 B. Defendants’ Qualitatively Materially False and Misleading Class
14 Period Statements and Omissions ...... 72
15 1. August 18 & 22, 2011 ...... 72
16 2. September 13 & 22, 2011 ...... 76
17 3. Fourth Quarter 2011 and FY 2011 ...... 79
18 4. First Quarter 2012 ...... 81
19 a. HP’s 2/22/12 Press Release was Materially False
andMisleading ...... 81 20
b. HP Announces Its 1Q12 Results ...... 82 21
5. Second Quarter 2012 ...... 83 22 a. HP’s 5/23/12 Press Release was Materially False
23 andMisleading ...... 83
24 b. HP Announces Its 2Q12 Results ...... 85
25 6. Third Quarter 2012 ...... 86 26 a. HP’s 8/22/12 Press Release was Materially False
andMisleading ...... 86 27
b. HP Announces Its 3Q12 Results ...... 88 28
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