harvey pitt said that earlier.f investors it is fraud. harvey pitt said that earlier. we haven't seen that evisceration of value in a long time. there are worse deals, aol/time warner, sprint/nextel, countrywide purchase by bankamerica i argue cost share holders a lot more over time. this certainly was no good. >> oracle posted a press release and said you did talk to us about as 6 billion deal. we thought the price was too rich even at that. to sell to hp for 11 billion and change, tough wonder what oracle knew about this and what they were thinking in valuing the company at 6 billion only to have the price nearly double a couple months later. >> people were questioning it at the time. they were questioning hp strategy, seemed out-of-the-box, the short-lived ceo made that decision, at the same time he was talking about splitting the company in two something reversed by current ceo meg whitman. you are right you kayla, was there more due diligence that could have been done? they relied on deloitte. >> david, this is herb. on this, deloitte has to be on the hook somewhe

the former chairman of the sec, harvey pitt and doug burns. welcome to you both. i want to go over a couple of facts in the case as we know it right now, which is not everything, not by a longshot, but here's what we know. a hedge fund manager receives insider information, secret trials. an alzheimer's drug. he finds out the results before anybody else and trades on it. he sells his stakes in a couple of drug companies and assures them. you have said both wall street has developed a reputation of not caring, which individuals make of this story? >> theefact is terrible economic conditions, that is what we have caused some people to try to cut corners or look for advantages. this will not sit well with individual investors, nor should it. this is blatant conduct at least if alleged, and if it is proven, this individual will do a substantial amount of jail time. gerri: of course you would not excuse anybody for doing something like this because of economic conditions are bad, having said that though, turnin3 to you because you have prosecuted these kind of cases bef

. >> no, i guess that's something we could ask our next guest because harvey pitt's the former chairmane's currently the ceo of calirama. why not just refer to it as fraud? given all the words they've used, knowing a bit about what at least they allege, what's your take here in terms of fraud or not fraud? >> it certainly is the plain import of them saying it's froud. the only thing i can think about the perhaps the lawyer's suggestion, that they use some less assertive words, but the allegation is fraud. the biggest problem i think that hp has though is can explaining its own failure. >> let eat try to separate the blame here. if you're deloitte, how nervous are you today? >> i think deloitte has to be both nervous and girding up for a long battle. i think this is when you have a right to this magnitude, people pay attention and deloitte is going to come under real scrutiny for its certification of financial statements and its failure to find any indications of this kind of fraudulent behavior. >> are you beginning to detect similarities to arthur anderson? i think there's a huge diffe