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HP sued for boardroom spying

HP sued for boardroom spying
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First Published: Thu, Aug 16 2007. 11 40 AM IST
Updated: Thu, Aug 16 2007. 11 40 AM IST
California: A group of reporters and their family members whose private telephone records were secretly obtained as part of Hewlett-Packard Co.’s boardroom surveillance scheme sued the technology giant and two former executives.
Five separate lawsuits claiming “illegal and reprehensible conduct” were filed in San Francisco Superior Court on 15August against Palo Alto-based Hewlett-Packard, former Chairwoman Patricia Dunn and Kevin Hunsaker, the company’s former ethics chief.
National scandal
Both executives were ousted last year because of their roles in HP’s probe of unauthorized leaks to the media. The probe turned into a national scandal for the world’s No. 1 seller of PCs and led to criminal investigations and congressional hearings over investigators’ use of Social Security government identification numbers and other personal information to trick phone companies into handing over confidential call logs.
The plaintiffs include three reporters from online media company CNET Networks Inc.’s News.com- Dawn Kawamoto, Stephen Shankland and Tom Krazit and one reporter from The Associated Press- Rachel Konrad, who is Shankland’s wife. Other plaintiffs are Kawamoto’s husband, Jon Kawamoto, and Shankland’s parents, Thomas and Rebecca Shankland.
Lawsuits allege:
* Invasion of privacy
* Intentional infliction of emotional distress
* Engaging in unfair business practices.
They have sought unspecified damages and a jury trial.
“We’re filing the lawsuits to make sure this never happens again,” said Kevin Boyle, one of the attorneys for the plaintiffs.
HP said it apologized to each of the people affected by the spying probe and made a “substantial” settlement offer. “Unfortunately, rather than respond to the offer, they have decided to sue,” HP said in a statement. “HP is disappointed by their decision and will defend itself.”
Defense lawyers for Dunn and Hunsaker did not immediately return calls from the AP for comment.
Modus operandi
The lawsuits come nearly a year after HP disclosed in a Sept. 2006 regulatory filing that investigators used a tactic called “pretexting” or pretending to be someone else to obtain private information from companies to spy on board members, journalists and their families.
Following month, California’s attorney general charged Dunn, Hunsaker and three private investigators with four felony counts each, including fraud, identity theft and conspiracy. Those charges were later dropped, with a Santa Clara County judge calling their conduct a “betrayal of trust and honour” that nonetheless did not rise to the level of criminal activity.
Separately, HP agreed to pay $14.5 million (Rs58 crore) in a civil settlement with the state, most of which was slated to fund investigations into privacy rights and intellectual property violations.
HP’s stock prices did not get impacted
Despite the uproar, the scandal had little effect on HP’s stock price, which jumped 27% since before the scandal was disclosed. The rise has created more than $20 billion in shareholder wealth.
HP is scheduled to report its third-quarter financial results after the market closes on 16August. Analysts are expecting another solid quarter of growth, with profit of 66 cents per share on $24.1 billion in revenues.
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First Published: Thu, Aug 16 2007. 11 40 AM IST