HP settles with SEC over pretexting scandal

By Shaun Nichols on May 25, 2007 2:05 PM
Filed under Software

HP has reached what it hopes will be the final settlement in last year's pretexting scandal.

The company has agreed to the terms of a cease-and-desist order from the US Securities and Exchange Commission that will allow it to avoid formally admitting to any wrongdoing.

The cease-and-desist order declares that HP mishandled its reporting of the resignation of board member Tom Perkins, and that HP should have disclosed that Perkins left because of his objection to certain company practices.

The practices were later revealed to be the investigation of boardroom leaks that included the use of pretexting and spying on HP employees and journalists covering the company.

The fallout from the investigation led to the resignation and eventual indictment of chairman Patricia Dunn, company attorney Kevin Hunsacker and two outside investigators.

Felony charges against Dunn were later dropped, and the other defendants agreed to plea bargains.

HP and its employees have been shielded from further legal action by the State of California following a December settlement in which the company agreed to pay US$14.5 million (A$17.6 million).

Three of the journalists targeted by the investigation filed suit against HP earlier this month.