HP pays $14.5m to settle investigation

Hewlett-Packard (HP) has paid $14.5m (£7.3m) to settle an investigation by California’s attorney general.

But the company’s former chairman, senior in-house lawyer and three others still face criminal convictions if found guilty of identity theft and fraud.

The settlement means that the company and its current and former employees are cleared of any civil liability arising from the scandal.

Under the terms of the settlement, $13.5m will be used to create a fund for the state attorney to investigate future privacy and identity theft crimes. The remaining money will be used as damages and to cover the cost of the investigation.

California’s top prosecutor, Bill Lockyer, began investigating HP in September when it was revealed that the company instructed an outside detective agency to determine who on HP’s board was leaking information to journalists.

This agency in turn hired another detective to gather information. The detective allegedly used ‘prextexting', or pretending to be someone else, to obtain information from telephone companies.

Chairman Patricia Dunn and senior in-house lawyer and head of ethics Kevin Hunsaker both stepped down because of the scandal. They, along with three private detectives, have been charged on four counts of identity fraud.

HP hired Jon Hoak, former general counsel of NCR, the Ohio-based tech company, to replace Hunsaker in October.

HP’s former general counsel Ann Baskins was not indicted. She stepped down in late September after 24 years at the company after pleading the Fifth Amendment (against self-incrimination) at a special House Committee hearing into pretexting. She is yet to be replaced.