FAQ: The HP boardroom leak scandal

FAQ: The HP boardroom leak scandal

Which government agency decides who's crossed the investigative line?

The responsibility for delineating whether unfair or deceptive pretexting occurred falls to the U.S. Federal Trade Commission. The Federal Communications Commission is also evaluating pretexting.

Whose heads are those on the floor?

That would be Patricia Dunn, the company's now-former chairman, who'll be replaced as chairman by Hurd. (And you can add former board member Keyworth and the May departure of HP director Thomas Perkins to the tally, too. Perkins left after coming to the conclusion (PDF link) that his calls had been improperly accessed. Before he left, though, he called for Dunn's head.)

In Friday's press statement, Hurd was expected to tell us how the company intends to handle the allegations -- and, perhaps, address reports that he, too, was aware of the pretexting. Those rumors drove HP stock down 5% on Thursday, September 21.

You said the investors were "a bit jittery"?

Hurd, who took over as CEO on April 1, 2005, has been good for HP's stock price, soothing investor worries after the uncertainties of the 2001 Compaq purchase. On the day he started as CEO, HP's stock opened at US$21.95 a share; the company made a laborious crawl in the past 17 months to the mid-US$30 range. Turmoil and ethical concerns make for market unrest, and that 5% drop on Thursday didn't do favors for anyone's nerves.

Will Hurd take over for Dunn?

Not allowed according to HP's corporate governance guidelines (here's a cached version; the original started redirecting to an Investor Relations page sometime after 3:30pm ET on September 22), but according to the September 22 press statement, Hurd will in fact serve in a dual CEO-chair role.

Who's investigating?

Federal and state officials aren't simply going to take the word of HP's legal staff on this. At the federal level, Hurd and other HP bosses have been summoned to testify about the matter in a House Energy and Commerce investigative subcommittee hearing on Sept. 28. At the state level, California Attorney General Bill Lockyer says that his office's investigation is ongoing, but so far he's seen no evidence that Hurd (at least) was involved. There have, however, been questions as to HP's continued cooperation in the investigation. Expect more attention as events unfold.

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