SEC, Federal Prosecutors Investigating HP-Compaq Merger

Hewlett-Packard Co. disclosed that the Securities and Exchange Commission and federal prosecutors have started separate inquiries into the company's last-minute discussions with two large shareholders over how they planned to vote on the proposed merger with Compaq Computer Corp. The questions come after the most vocal opponent of the merger, Walter Hewlett, a member of the company's board of directors and son of one of the founders, filed suit alleging that Hewlett-Packard improperly influenced Deutsche Bank AG to support the merger in a March 19 vote.