In the settlement, HP has agreed to pay $14.5 million to the state of California

California Attorney General Bill Lockyer announced that Hewlett-Packard will reportedly pay $14.5 million to settle a civil lawsuit filed by the California attorney general after HP admitted to hiring private investigators that used illegal methods to get private records on HP board members and journalists.

The actual fine is only $650,000 but the majority of the money will be used to create a California “privacy and piracy fund,” which will be used as a tool for state investigators to fight various privacy and intellectual property violations. “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,” HP chief executive Mark Hurd said.

HP has also pledged to strengthen monitoring so that future investigations will strictly comply with ethical and legal standards. California state officials hope that other companies will take notice and begin to work harder to “protect confidential business information without violating corporate ethics or privacy rights.”

Along with the settlement, the state of California is looking into a possible settlement of criminal charges against Patricia C. Dunn, ousted former HP chairman. Lockyer initially filed fraud and conspiracy charges against Dunn in October for her part in the HP scandal. Dunn, along with four others involved with the scandal had felony charges filed on her in early October.

"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer
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