HP To Pay $6 Mln Fine To Settle Undisclosed Sales Practices Charges

(RTTNews) - HP Inc. (HPQ) agreed to pay $6 million fine to settle U.S. Securities and Exchange Commission charges that the tech giant misled investors by failing to disclose the impact of sales practices undertaken to meet quarterly sales and earnings targets.

The SEC determined that Palo Alto, California-based HP violated the anti-fraud, reporting and disclosure controls provisions of the federal securities laws.

According to SEC, from early 2015 through mid-2016, in an effort to meet quarterly sales targets, regional managers used incentives to accelerate or "pull-in" to the current quarter sales of printing supplies that they otherwise expected would materialize in subsequent quarters, according to the SEC order disclosed today.

"The order further finds that, in an effort to meet revenue and earnings targets, managers in one HP region sold printing supplies at substantial discounts to resellers known to sell HP products outside of the resellers' designated territories, in violation of HP policy and distributor agreements," the SEC said.

HP altered its go-to-market model in part to address the undisclosed sales practices and undertook a channel inventory reduction that reduced its net revenue by about $450 million in the third and fourth quarters of 2016, according to the SEC.

The company did not admit or deny wrongdoing in agreeing to the civil settlement, the SEC said.