HP Settles Spying Suit

December 11th, 2006: HP has agreed to a US$14.5 million settlement with the California Attorney General to resolve civil claims stemming from the recent spying scandal that rocked the company.

As the scandal goes, HP reportedly hired private investigators to uncover boardroom leaks. This decision kicked off a series of actions, including the use of fake identities to obtain private phone records and the surveillance of journalists to divine which board director was leaking information.

The agreement calls for HP to not only open its wallet, but also to implement a number of measures to ensure that its internal investigations are conducted in accordance with California Law. The state also won't pursue new civil claims against the company or current and former directors and employees according to HP.

"We are pleased to settle this matter with the Attorney General and are committed to ensuring that HP regains its standing as a global leader in corporate ethics and responsibility," said Mark Hurd, HP chairman and chief executive officer.

US$13.5 million of the settlement will go towards a new "Privacy and Piracy Fund" for law enforcement in California, while US$650,000 will cover civil penalties and US$350,000 will go to fees covering California's investigation costs.

With 2006 revenues of US$91.7 billion, US$14.5 million amounts to not much more than pocket change for the PC giant, however, it does serve as a timely reminder of corporate responsibility.

The company may not be completely off the hook yet either, as it still faces investigations by the US Securities and Exchange Commission, Justice Department and shareholder lawsuits.

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