HP settles disclosure case with SEC
Published: 24 May 2007 09:53 BST
HP and US regulators have settled allegations concerning an investigation that HP launched last year to uncover a boardroom leak.
HP "failed to disclose the reasons" for which a board member had resigned, according to a statement released by the Securities and Exchange Commission (SEC). The board member, Thomas Perkins, gave up his director's position due to his objections over the company's investigation into leaks to the press. Federal law requires public companies to fully disclose the reasons why a director leaves.
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"HP acted in what it believed to be a proper manner," said Michael Holston, HP's executive vice president and general counsel. "However, we understand and accept the SEC's views and are pleased to put this investigation behind us."
As part of the settlement with regulators, HP agreed to a cease-and-desist order but neither admitted nor denied any wrongdoing as part of the administrative proceeding, the SEC said.
"The company viewed this as a personal dispute between a director and the chairman and opted to stay silent," said Marc Fagel, associate regional director of the SEC's San Francisco office. "But the failure to make the required disclosures deprived investors of important information about the management of the company by its board."
Since word of HP's controversial internal investigation — which included gathering private phone records from journalists (including three from ZDNet UK's sister site CNET News.com), board members and several employees — became public in September 2006, HP has worked to put the incident behind it.
Most of the HP employees involved in the case are no longer with the company, including former chairman Patricia Dunn. In March, a judge dismissed felony charges against Dunn and others who took part in the HP probe.
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