HP's Autonomy deal highlights pattern of bad ideas

But Apotheker's ouster may not be enough to placate shareholders who are seething with renewed anger over the deal. The allegation that Autonomy had been "willfully'' deceptive leading up to HP's purchase raises the specter of a criminal investigation. It also opens a torrent of potentially distracting class-action lawsuits on behalf of shareholders alleging HP's board was negligent.

“When I talk to investors, that is what they are concerned about: the credibility of the board,'' said Sterne Agee analyst Shaw Wu. "There already has been a lot of turmoil at this company, but maybe they still need more change.'' Wu said he isn't even sure Whitman's job as CEO is safe because of her presence on the board when the Autonomy deal was approved.

In a research note, Topeka Capital Markets analyst Brian White called for a new purge of HP's board.

Whitman said she regrets voting in favor of the Autonomy acquisition while insisting HP did its due diligence. That was an assertion echoed by Apotheker in a prepared statement.

HP Chairman Ray Lane, who joined the board when Apotheker was hired in 2010, didn't respond to an interview request Tuesday.

Mark Williams, a finance professor at Boston University and a former bank examiner for the Federal Reserve, called HP's accusations against Autonomy ``due diligence deflection''.

"Just to say `we paid too much because of fraud' doesn't negate the fact of inadequate due diligence,'' said

... contd.