- Summary: When Hewlett-Packard's (NYSE:HPQ) non-executive Chairman, Patricia Dunn (pictured), authorized investigators to look into press leaks in January 2005 that Hewlett-Packard directors had concerns about the company's performance under then Chairman and CEO Carly Fiorina, who was subsequently fired, she never would have imagined the result would be a full-fledged state investigation into the methods H-P's investigators used. H-P's outside counsel, prominent Silicon Valley lawyer Larry Sonsini, assured Tom Perkins, an H-P director who angrily resigned in May over a search of directors' phone records, that the probe -- including its use of a practice called "pretexting" to obtain the phone records -- was "well done and within legal limits." Yet, yesterday, a spokesman for California Attorney General Bill Lockyer said that state investigators now believe there was criminal activity involved in the methods used to search those records. Besides H-P directors, the company disclosed that nine reporters, including Pui-Wing Tam of The Wall Street Journal, had their phone records accessed by investigators working for H-P. The company maintains that it was unaware that pretexting was being used. Pretexting is illegal in the state of California. Furthermore, H-P claims to be "dismayed that the phone records of reporters were accessed without their knowledge," adding that they "are completely and fully cooperating with the state attorney general's investigation." In the case of Mr. Perkins, whose phone records were also obtained, an unidentified person set up a fraudulent online account in January for his residential phone service, using the executive's telephone number and the last four digits of his Social Security number. It is not known how his Social Security number was obtained.
- Comment on related stocks/ETFs: For more on H-P's unfolding scandal, see yesterday's WSJ excerpt on the company. The chorus of voices calling for current Chairman, Patricia Dunn, to step down is growing each day. Barron's Tech Trader Daily has more.
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