Companies
HP settles civil suit but questioning continues
Hewlett-Packard (HP), the US computer
company, has agreed to pay $14.5m to settle civil claims arising from an
investigation into boardroom leaks to the press. Senior HP executives instigated
a probe that used the legally dubious method of pre-texting to obtain personal
phone records of journalists and fellow board members.
The settlement was reached with Bill Lockyer, the
California attorney general, and $13.5m
of the payment will be used to create a privacy and piracy fund to assist
Californian prosecutors in investigating consumer privacy and information piracy
violations. The agreement also requires HP to appoint a chief ethics and
compliance officer.
Bill Lockyer said HP’s settlement should help guide companies protect
confidential information without violating corporate ethics. Criminal
proceedings against ex-chair Patricia Dunn and four other defendants are
continuing - have been charged with counts including identity theft.
Meanwhile, two Democrat members of the US
House of Representatives'
committee on energy and commerce
wrote to Mark Hurd, Hewlett-Packard chief executive, asking him to explain his
$1.37m sale of options immediately before the pre-texting scandal became public.
In a
letter to Hurd, the committee members said the options sale does not appear
to be part of any pre-scheduled programme and asked to be informed whether Hurd
was in possession of potentially damaging material information not available to
shareholders when the sale was made. Hurd was also asked whether any other HP
directors took part in similar sales during this period.
Separately, Bob Wayman retired as chief financial officer
of HP at the end of 2006 and was succeeded by the company’s treasurer, Cathie
Lesjak. Wayman will remain on HP’s board until the 2007 annual shareholder
meeting in March. In 2005 Wayman served as interim chief executive after the
resignation of Carly Fiorina and prior to the appointment of Mark Hurd.
Links
Hewlett-Packard
California Attorney General
House of Representatives
Committee on Energy and Commerce
Committee Democrats
January, 2007 |
