HP Spy Probe Gets an Upgrade

UPDATED: Along with the financial good news of HP’s latest quarterly results and profit growth, its boardroom spy scandal is germinating.

In a filing with the Securities and Exchange Commission (SEC), the Palo Alto, Calif.-based systems vendor said it remains the target of “various governmental inquiries” for its use of pretexting to obtain the personal telephone records of board members and the media.

The SEC, for instance, has upgraded its probe to a formal order of investigation. HP has also received a request from the Federal Communications Commission (FCC) for records and information relating to the leak investigations.

In addition, the California Attorney General’s office, the U.S. Attorney’s Office for the Northern District of California and the U.S. House Energy and Commerce Committee are all investigating if HP broke state or federal laws in its internal investigation.

HP, according to the filing, also remains the subject of four stockholder lawsuits based on the company’s privacy practices in California. Another lawsuit has been filed in Delaware.

“It is our policy to neither confirm or deny any investigations,” an SEC spokesman told internetnews.com.

However, in late September Kris Anne Monteith, chief of the FCC’s enforcement bureau, told Congress: “We issued Letters of Inquiry to a number of wireless and wireline carriers asking for information related to whether any [personal phone records] of their customers was disclosed without authorization in connection with Hewlett Packard’s activities.”

Ryan Donovan, director of corporate media relations, said in statement to internetnews.com, “HP does not believe this represents an escalation or broadening of the investigation and is continuing to cooperate fully.”

Pretexting is the practice of impersonating the identity of another person to gain access to his or her records, in this case, phone records. HP officials have admitted using the technique to find the source of its boardroom leaks to the media.

The scandal led to a flurry of resignations. Former Chairman Patricia Dunn, general counsel Ann Baskins and Kevin Hunsaker, HP’s then ethics chief and in-house lawyer, have all left the company.

This week, Dunn pleaded not guilty to the felony charges. The other defendants in the case also pleaded not guilty.

California Attorney General Attorney General Bill Lockyer indicted Dunn and Hunsaker for conspiracy, fraudulent wire communications, wrongful use of computer data and identity theft.

Also facing California charges are Ronald DeLia, managing director of Security Outsourcing Solutions (an outside security contractor for HP), Matthew Depante, manager of Florida-based information broker Action Research Group (ARG) and Bryan Wagner, a Colorado-based employee of ARG.

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