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HP Settles Lawsuit

Computer giant, Hewlett-Packard Co. (HP), will pay $14.5 million in a settlement to a lawsuit filed against the company by California`s top prosecutor Bill Lockyer. The company was accused of unfair business conduct while investigating leaks to the press from its board of directors. Lockyer said that most of the $13.5 million will be transferred to create a Privacy and Piracy Fund that will fund investigations into infringements on privacy and intellectual property.

"Hewlett-Packard is not Enron" said Lockyer. He explained that HP collaborated with the authorities and didn`t attempt to cover up the incident. The company will also pay $650 thousand civil fine and $350 thousand to cover investigation and trial costs. HP has also agreed to undergo management reforms so that the incident will not repeat itself. The company told the press that no further lawsuits will be filed against the company or its employees.

The lawsuit was HP`s first from to be filed by a government agency. It began with a scandal in September that later on led to the filing of criminal charges against former chairwoman Patricia Dunn, as well as, another 4 of the company`s executives. The prosecution claimed that HP hired external private detectives, who scammed the phone companies into giving them the private phone records of the members of the board, journalists and others. Once this was exposed several executives resigned, some were indicted by Congress, the FBI and other agencies. HP share prices were nearly not effected by the scandal, mainly due to good financial reports and the belief that the incident will not have any long term effects on the company`s performance.