HP and SEC Settle Pretexting Scandal
May 25, 2007 12:26 AM
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Both HP and the U.S. SEC are glad to officially close the door on the pretexting scandal
In an attempt to finally move past
last year's pretexting scandal
, Hewlett-Packard recently announced that it settled with the United States Securities and Exchange Commission. The SEC opened an investigation into HP activities about how the company disclosed the resignation of Tom Perkins from the HP board in May 2006. According to the SEC, HP should have fully disclosed Perkins left the company due to his objection of certain boardroom practices.
"HP acted in what it believed to be a proper manner. However, we understand and accept the SEC's views and are pleased to put this investigation behind us," said Michael Holston, HP executive vice president.
The cease-and-desist order from the SEC will allow the company to
move on without officially admitting any wrongdoing
The SEC did not penalize HP with a monetary fine or other form of punishment. According to Marc Fagel, associate regional director for the San Francisco SEC office, HP wasn't punished because, "It was a new rule and [HP] relied on their attorneys."
Fallout from the scandal included the abrupt resignation of Perkins, and indictments on chairwoman Patricia Dunn, a company attorney and two others. The felony charges were
eventually dropped against Dunn, and the others
made plea bargains
with the prosecution.
In an e-mail made to the press, Perkins admitted he is happy the "HP boardroom drama is now satisfactorily concluded."
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Now read the original-Press release
5/25/2007 4:41:46 AM
SEC Settles Charges Against Hewlett-Packard for Misleading Disclosures Arising Out of Company’s Boardroom Leak Investigation
FOR IMMEDIATE RELEASE
Washington, D.C., May 23, 2007 — The Securities and Exchange Commission today filed settled administrative charges against Hewlett-Packard Company for failing to disclose the reasons for a director’s abrupt resignation in the midst of HP’s controversial investigation into boardroom leaks. The Commission found that several months before the public revelation of the company’s leak investigation, an HP director objected to the company’s handling of the matter and resigned from the Board, yet HP failed to disclose the reasons for his resignation as required by federal securities laws.
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