HP pays $14.5m to end 'spy' probe
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Hewlett-Packard agrees to pay $14.5m to settle a lawsuit over its much-criticised probe into a boardroom leak.
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The UK government is told to pay a former spy Â£5,000 for breaching his human rights after a case that stopped him receiving book royalties
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Ameriprise Financial Services Inc. will pay $25,000 to settle a probe of how one of its laptop computers went missing with the personal data of thousands of Massachusetts residents, Secretary of State William F. Galvin said yesterday.
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Hewlett-Packard Co., a leading maker of personal computers and printers, has agreed to pay &#36;141 million to settle patent disputes with software maker Intergraph Corp., both companies announced Friday.
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(InfoWorld) - Hewlett-Packard chief executive officer Mark Hurd blamedÂ the scandalÂ that has besieged his company on "a rogue investigation" that got out of hand, in an advance copy of his Congressional testimony released by a House Subcommittee on Wednesday. "How did such an abuse of privacy occur in a company renowned for its privacy? The end came to justify the means," Hurd wrote. "The investigation team became so focused on finding the source of the leaks that they lost sight of the privacy of reporters and others. They lost sight of the values HP has always represented." Former HP Chairman Patricia Dunn,Â forced to resignÂ Sept. 21 because of the scandal, defended in her testimony her decision toÂ investigate the leaksÂ of confidential board discussions to the news media. In her testimony, Dunn wrote that she knew investigators were obtaining the phone records of people it was investigating. Lawyers for HP and for an investigation firm carrying out the probe assured her the tactics were legal, she wrote. "I was fully convinced that HP would never engage in anything illegal," she wrote. "Given that attorneys were unambiguously overseeing the investigation ... reinforced my understanding that the investigations were being handled appropriately." Both are among severalÂ witnesses expected at a hearingÂ before the Oversight and Investigations Subcommittee of the House Energy and Commerce Committee on Thursday in Washington. The committee is looking into the practice of "pretexting," or using false pretenses to gain access to confidential records. Investigators hired by HP to find the source of leaks engaged in pretexting to get hold of the phone records of directors, HP employees and reporters who cover the Palo Alto, California, technology company. Hurd, echoing comments he made in a news conference last Friday at HP's headquarters, said he was determined to get to the bottom of this episode and to try to restore HP's image. "I pledge that HP will take whatever steps are necessary to make sure nothing like this ever happens again," he wrote, "and that this company will regain not just its reputation ... but its pride." Although much of the criticism of the scandal surrounds the tactics used by the investigators, Dunn wrote in her testimony that equal consideration should be given to the leaks from within the company that damaged HP. HP's board was notorious for its leaks to news media and such disclosures made it difficult for the board to deal with important issues candidly, she wrote. Dunn explained that board deliberations on the selection of a replacement for former CEO Carly Fiorina in 2005 were leaked. She cited a BusinessWeek magazine story "disclosing opinions about various candidates and revealing details about ... the search process." "If you were a top CEO candidate, would you want to work for a company whose board could not be trusted to keep such information confidential? HP is very lucky to have been able to recruit Mark Hurd under such circumstances," Dunn wrote. "I wish fervently that none of this had ever happened," Dunn continued. "But boards have an unquestionable obligation to take steps to prevent [leaks]. That certain steps taken during the investigation went well beyond what was appropriate does not undermine the importance of the board's mission in this matter." Hurd also outlined several steps the company is taking internally to clarify its privacy policy for employees and to emphasize it in employee training programs.ADVERTISEMENTMAKE SOA REAL WITH IBM WEBSPHERE PODCASTStreamline processes and maximize efficiency within a proven service oriented architecture. Take back control of your business processes with IBM WebSphere.
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California is creating a $13.5 million fund to protect privacy. And the state has Hewlett-Packard (HPQ) to thank for it.
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(InfoWorld) - Washington's attorney general has settled the first case prosecuted under the state's 2005 Computer Spyware Act. The settlement. announced Monday, is with antispyware vendor Secure Computer LLC. The White Plains, New York, software companyÂ was accused of marketing its product via deceptive spam and pop-up ads, which offered free spyware scans that always detected a problem with the computer that was scanned. The company and its president, Paul Burke, will pay $725,000 in legal fees and $200,000 in penalties, and will reimburse Washington state customers $75,000, said Paula Selis, senior council with the attorney general's office. "Given the scope of the defendants' practices and the amount of consumer harm out there, we feel this is a very fair settlement." More than 1,100 state residents purchased the company's Spyware Cleaner software since it went on the market in 2004, Selis said. Those customers will now be e-mailed by Secure Computer and offered a refund for the $49.95 product, under terms of the settlement. Secure Computer, which admits no wrongdoing in the matter, is also prohibited from usingÂ deceptive marketing techniquesÂ to promote its software, and the company must now review the advertising of its marketing affiliates to make sure they comply with the settlement. That seems like an unlikely possibility, however, because Spyware Cleaner was pulled from the market shortly after the lawsuits were filed in late January, and Secure Computer LLC is now out of business, according to the company's Web site. Representatives from Secure Computer could not be reached for comment. Secure Computer and four of its business partners were sued by Microsoft and the Washington attorney general in January, but charges against three of the men have already been settled. A fourth man, Manoj Kumar of Maharashtra, India, could not be located, the attorney general's office said. Â
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SAN JOSE, Calif. - Hewlett-Packard Co. agreed Thursday to pay $14.5 million to settle a lawsuit brought by state Attorney General Bill Lockyer accusing the company of unfair business practices in its crusade to unmask the source of boardroom leaks to the news media.
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(InfoWorld) - The U.S. Department of Justice is asking questions about conduct by Hewlett-Packard Co. that has embroiled the technology company in controversy. HP acknowledged in a U.S. Securities and Exchange Commission filing Monday that it isÂ cooperating with an inquiryÂ by the U.S. Attorney for the Northern District of California intoÂ possibly illegal tactics used by investigators hired by HP to investigate news leaks from the company's board members. HP described the U.S. Attorney's inquiry as "informal" and said the questions are similar to those asked by the attorney general of California. HP is based in Palo Alto, California. "We are cooperating fully with these inquiries," HP said in its SEC filing. The probes are looking into the use of "pretexting" to search phone records to determine which board members may have been talking to reporters. The phone records of nine reporters from various news organizations were also obtained to determine who their sources from within HP might have been on stories about the company. Pretexting refers to posing as a phone company customer to get access to personal records. California Attorney General Bill Lockyer says a crime was committed in connection with the pretexting, but his office is still investigating what crime and by whom. The scandal has brought pressure on HP Chairman Patricia Dunn, who ordered the investigation, but claims she didn't know the outside investigative firm hired to trace the leaks would engage in pretexting. HP's board is meeting Monday for the second straight day to discuss its response to the controversy. Former HP director Thomas Perkins, who quit in protest in May because of the way the investigation was conducted, called on Dunn to resign. His statement, released Saturday by his attorney, was prompted by Dunn's comments in media interviews last week in which she alleged that it was Perkins who wanted "more aggressive measures" used to investigate the leaks, including use of lie detectors on board members. "I am saddened, but not surprised, that Patricia Dunn has attacked me personally for doing my job. I acted not from any ill will toward Ms. Dunn but to protect the best interests of HP. I think the past months and days have shown that those interests are best served if Ms. Dunn would resign from the board," said Jenkins in his statement. The U.S. Federal Communications Commission also is investigating HP. The FCC reportedly sent a "letter of inquiry" to AT&T Inc. asking how its customer phone records may have been accessed, according to an Associated Press report. An FCC spokesman could not confirm that. HP's internal probe identified director George Keyworth as the source for a CNet Networks Inc. story about HP's strategy, which the technology news Web site posted in January. He refused to resign when asked to doÂ so by Dunn in May, but theÂ board has since voted not to renominate him to his seat. Â
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(InfoWorld) - Despite aÂ boardroom scandalÂ that seems to deepen every day, Hewlett-Packard has won new contracts this week, including one that could be worth $5 billion over the next 10 years. The U.S. Army awarded HP a contract that allows several U.S. agencies to order products including desktop PCs, laptops, printers, scanners and displays from HP. The deal does not include specific volumes of products but HP estimates that it will be worth $5 billion. The contract could last as long as 10 years if the groups agree on optional extensions. HP expects to begin taking orders Oct. 1. HP has also signed a seven-year extension on an outsourcing deal with DirecTV. HP will continue providing IT operations and applications testing services that help DirecTV introduce new services, acquire customers and ensure bills are sent accurately and quickly. HP will also offer local area network management, data center operations, database support and disaster recovery for DirecTV. The contract extension is valued at about $500 million. The deals come at a troubled time for HP. The company's chairman said this month that she willÂ step downÂ for her part in an investigation of internal company leaks that involvedÂ obtaining private phone recordsÂ of HP employees and journalists. Details of the extent of the investigation, and the extent to which HP's top executives were involved in it,Â continue to surface. Â
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Computer Associates International, Inc. said yesterday that it would pay $225 million to settle investigations by the Department of Justice and the Securities and Exchange Commission.
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(InfoWorld) - In one of his first public acts to address the burgeoning Hewlett-Packard Co. (HP) spy scandal, Chief Executive Officer Mark Hurd plans to brief reporters Friday about the findings of an analysis conducted by the company's law firm. HP retained Morgan, Lewis & Bockius for the outside analysis of the company's actions in trying to find the source of a boardroom news leak. The scandal led toÂ the resignation of company Chairman Patricia Dunn, who will turn over that job to Hurd in January. Dunn and Hurd have said they knew about the operation, but insist they never approved of the possible illegal methods used by third-party investigators to obtain communications records of reporters and some HP employees and directors. "What began as an effort to prevent the leaks of confidential information from HP's board room ended up heading in directions that were never anticipated," Hurd said in a written statement. However, company e-mail records seem to indicate that both executives knew about the investigators' "pretexting" practices while they were going on, according toÂ recent stories in the Wall Street Journal and The New York Times. Pretexting involves pretending to be someone to obtain their telephone records. In Friday's meeting, a representative from the law firm will share its findings, describing "exactly what took place and when," Hurd said. Dunn has also saidÂ she will share more information about the episode, promising to "set the record straight" about allegations that she oversaw the illegal operation. Morgan Lewis will also represent the company in government inquiries such as criminal investigations by the California and Massachusetts attorneys general, and by the U.S. House of Representatives. California Attorney General Bill Lockyer has said that he has enough evidence to indict certain people at HP and its contractors with crimes related to their methods in obtaining private phone records of reporters, board members and other employees. Â
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Hewlett-Packard has agreed to a financial settlement with The New York Times and three Business Week magazine journalists in connection with the companyâs spying scandal.
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(InfoWorld) - Hewlett-Packard has entered into mutual agreements with two former directors caught up in theÂ board spying scandalÂ not to file lawsuits over the dispute. The company disclosed the agreement in a filing to the U.S. Securities and Exchange Commission on Thursday. In the same filing, HP said it has agreed to pay some of the directors' legal expenses in connection with the investigations. The SEC has asked for more information on the circumstances surroundingÂ Thomas Perkins' resignationÂ from HP's board of directors over the spying scandal, HP said in the filing. HP also revealed the terms under which Perkins and directorÂ George Keyworth left the board. They resigned after it was revealed that private investigators hired by HP may haveÂ used illegal methodsÂ to identify Keyworth as the source of leaks of board deliberations to the news media. Separately on Thursday, HP said chief executive officer Mark Hurd "has offered to appear" before a House subcommittee probing the scandal. Other HP executives, Chairman Patricia Dunn and others implicated in the scandal haveÂ accepted invitations to appearÂ at a Sept. 28 hearing. HP said in the SEC filing that it has entered into a "Mutual Release and Indemnification Agreement" with Perkins and Keyworth in which the two former directors agreed not to file claims against other directors, officers or employees of HP. In turn, the company agreed not file claims against them. HP will also pay legal fees Perkins and Keyworth may incur in cooperating with government investigations of the scandal. Besides the House inquiry, the California Attorney General and the U.S. Attorney for Northern California are conducting probes. The SEC filing also said Perkins and Keyworth reserve the right to take legal action against private investigation companies that HP allegedly hired to probe the source of board leaks. HP told the SEC on Sept. 6 that it had discovered those outside firms engaged in a possibly illegal practice called "pretexting" while digging into the personal phone records of directors, HP employees and journalists. The investigators' probe identified Keyworth as the confidential source. He initially refused to resign when confronted by the board in May, but he quit on Sept. 12. HP also said in the filing that it is cooperating with an SEC request for additional information about the circumstances of Perkins' resignation in May. HP's SEC filing at that time noted Perkins' resignation without elaborating. Perkins, who said he resigned in protest of the way HP was conducting its investigation, later lobbied the company to amend its notice with more detail. Hurd is set to lead a news conference Friday at HP headquarters in Palo Alto, California, to reveal the results of a separate investigation of HP's leak probe. After the scandal broke and reports surfaced about how involved HP executives may have been in overseeing the private investigators' activities, HP brought in the law firm of Morgan, Lewis & Bockius to investigate. A representative of the firm will present its findings at the news conference. News reports in recent days have revealed Hurd, Dunn and other HP executives were moreÂ involved in the leak probeÂ than they had earlier indicated. Â
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(InfoWorld) - Two U.S. Congressmen have asked Hewlett-Packard Co. (HP) Chief Executive Officer Mark Hurd to explain why he sold US$1.37 million worth of HP stock just before theÂ company's spying scandal became public. Congressmen John Dingell and Mark Stupak, both Michigan Democrats, sent a letter to Hurd Wednesday requesting an explanation and asking for a response by Dec. 21. "We look forward to responding to the committee's inquiry," said HP spokeswoman Emma Wischhusen. Both congressmen are ranking members of the investigations subcommittee of the House Energy and Commerce Committee, which in September held hearings on the HP pretexting scandal. In his testimony, Hurd apologized for the investigation HP undertook in which private investigators used false pretenses, called pretexting, to gain access to the phone records of people being investigated to trace leaks of board deliberations to the media. In their letter, Dingell and Stupak note that Hurd sold $1.37 million in stock options on Aug. 25, the same day Hurd was briefed by attorneys for Wilson Sonsini, one of HP's outside law firms, about the pretexting investigation and possible legal liability for the company over it. The scandal became public Sept. 6 when HP filed a notice with the U.S. Securities and Exchange Commission acknowledging that director Thomas Perkins resigned over the way the leak investigation was conducted. "The August 25 transaction does not appear to be part of any prescheduled program," the congressmen wrote in their letter to Hurd. "Please explain the reason for this transaction." Questions about the timing of HP executives' stock trades around the same time are also the subject of aÂ shareholder lawsuit against the technology company. The suit, filed Nov. 29 in Santa Clara County Superior Court in California, accuses Hurd and seven other HP executives of selling a total $41.3 million worth of shares between Aug. 21 and Sept. 6 based on insider information that the pretexting scandal was about to become publicly known. HP issued a statement at the time the lawsuit was filed calling it "baseless." As it is, HP's stock price wasn't adversely affected by the scandal as investors regarded it as unrelated to the company's operations. Â
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Supermarket giant Wal-Mart agrees to pay $14.5m to settle a lawsuit over gun sales violations in California between 2000 and 2003.
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(InfoWorld) - A day after Hewlett-Packard Co. (HP)Â chairman Patricia Dunn promised to step down for her role in a spy scandal, the state of California is continuing its effort to indict her and the private investigators she used. Dunn's actions were not merely unethical but actually violated the law, and the state now has enough evidence to indict people both within HP and contractors outside the company, according to Thomas Dressler, a spokesman for California Attorney General Bill Lockyer. In her efforts to discover the source of press leaks about board deliberations,Â HP has acknowledged that Dunn hired a private investigation firmÂ to pose as the 10 suspected board members and journalists in order to convince the phone company to disclose private phone records. This is a practice known as pretexting. In an interview on The NewsHour with Jim Lehrer Tuesday, Lockyer said that under California law, people involved in the probe could be charged with crimes both for falsely taking another person's identity and for accessing computer records with their personal information. Dressler confirmed Lockyer's comments. HP hired investigation firm Security Outsourcing Solutions Inc. (SOS), which shares its Boston offices with a law firm called Bonner, Kiernan, Trebach and Crociata, according toÂ a report in The New York Times that sited sources close to the case. The Times also said that the California and Massachusetts attorney generals were working together on the case. Dressler declined to confirm the name of the security firm HP hired, or whether California and Massachusetts are working together on the case. "I'm not going to deny it, but beyond what the attorney general said I'm not going to comment. It's not prudent for prosecutors to mention names before bringing charges," Dressler said. A call to SOS on Wednesday was answered by a woman who recited the name of the law firm, but denied the two businesses were connected. She declined to give her name, and said that no one was immediately available for comment. Ironically, an SOS newsletter posted on the firm's Web site warns corporate executives that their privacy is at risk since their Web surfing and e-mail records can be traced by Internet browsers and cookies. It advises clients to shield their identities by using a Web site called Anonymizer.com. Â