HP leaks spur federal investigation
U.S. Attorney's office joins California attorney general in probing tactics used by computer maker.
NEW YORK (CNNMoney.com) -- The investigation into tactics Hewlett-Packard used during an internal company probe has widened to include an inquiry from the U.S. Attorney's Office for the Northern District of California, the computer maker said Monday.
HP (Charts) has been "informally contacted" by the federal prosecutor's office, which is requesting information related to the methods used during the company's investigation of leaks to the news media, the Palo Alto, Calif.-based company said in a quarterly report filed Monday with the Securities and Exchange Commission.
The disclosure comes a day after the computer maker's board convened an emergency meeting. The board is set to continue deliberations late Monday.
HP, one of the nation's largest technology companies, has become the talk of corporate America, from Wall Street to Silicon Valley, as the company's board may have used illegal methods to spy on some directors as well as reporters.
The outside investigators hired to find the source of the company leaks used personal information to pose as HP directors and reporters and got AT&T (Charts) and other phone companies to turn over records of home and mobile phone calls.
California Attorney General Bill Lockyer is also investigating the tactics HP's outside investigators used during their probe. Posing as someone else to obtain confidential information, a practice known as pretexting, is illegal in California.
HP said it is fully cooperating with both inquiries.
The scandal gripping HP has rocked the board of the iconic computer and printer maker. George Keyworth, the board member fingered as the source of the leaks, was asked to resign but refused to do so. HP has said it won't renominate Keyworth to the board.
Thomas Perkins, another board member, quit in protest of the surveillance tactics used by HP's investigators. The investigators hired by HP used Cox Communications' Internet service to create an online AT&T account for Perkins and access his phone records. Lockyer's office has filed a search warrant and affidavit to access Cox's customer records and discover who created that account.
Chairman Patricia Dunn has come under fire for initiating the probe. Dunn has said she has no plans to step down but would do so if asked by the board.
The drama unfolding at HP comes just as the company has been getting back on track and gaining ground on its key competitors, Dell (Charts) and IBM (Charts). Shares of HP have surged nearly 70 percent since new chief executive Mark Hurd joined the company last April.