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HP Faces Expanded Civil Lawsuit in Spying Case 45

narramissic writes "ITworld is reporting that a shareholder lawsuit against HP for pretexting has been expanded to include charges of insider stock trading. On top of everything else, eight executives implicated in the spying ring also participated in the sale of 1.7 million shares of the company. " From the article: "An amended complaint filed Wednesday in the Superior Court of California for Santa Clara County accuses HP Chairman and Chief Executive Officer Mark Hurd and seven other company executives of selling $41.3 million worth of HP stock at 'inflated prices' shortly before the company revealed that its investigators had used questionable and possibly illegal techniques to gain access to personal records such as phone call logs."
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HP Faces Expanded Civil Lawsuit In Spying Case

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  • Can anyone explain to those who haven't been following this what this 'spying' story was all about?
    • Here's one of the slashdot articles [slashdot.org] on the spying scandal. Basically their new CEO was trying to stop press leaks so started spying on folks, his success at turning around HP's finances is really the only thing keeping him around.
    • Re:Spying? (Score:5, Insightful)

      by Himring ( 646324 ) on Thursday November 30, 2006 @05:33PM (#17057442) Homepage Journal
      Sure:

      Some people wanted to know who was talking about them behind their backs. They suspected certain people, but were not sure. So, they got with these other people who told them about fooling the cell phone companies into helping them view their phone records. It was easy. Just call the cell phone company, lie and say you are the person who owns the account, and the cell phone company will help you access the phone logs. So, they did, and sure enough, they found out it was Billy who had been talking to Sara about Jim & Mary's relationship. But, when Billy found out he got mad and called the cops. Sara & Jim, who lied to get the logs, got in big trouble. They had to pay 1000s of dollars in court costs, lost their jobs and went into bankruptcy. The prosecuting attorney and law enforcement couldn't believe the stark crime that had been committed -- lying to get into someone's records. All were punished who needed to be and all were justified who needed to be....

      Oh wait, you were asking about the big important people who did the same thing but from a corporate-level. Why, they are professionals who would never break the law. They did everything by-the-book and by-the-policy. They used corporate avenues and channels to rightly get phone records by lying -- I mean, pretexting -- sold stock to make tons of money on the deal and will never spend a day in jail. They are richer by the hour, by the minute. You see, big important people are different and have different rights than folks who have trouble keeping their gas-tanks filled week-in and week-out....

      And only the little girl saw clearly that the emperor had no clothes....

    • Lawyers gotta eat too. And send their kids to private school, and make the insurance payments on the Ferrari...
  • by Josh Lindenmuth ( 1029922 ) <joshlindenmuth@@@gmail...com> on Thursday November 30, 2006 @05:20PM (#17057254) Journal
    This sounds pretty bad, until you look at the insider trading history for HP [yahoo.com]. It appears that, with the exception of Mark Hurd, most insider trades were fairly normal for the officers involved. It's not surprising that Mark Hurd was selling 200,000 shares during this timeframe, as 1/2 were exercising an option and the other half was only ~15,000 shares above his prior disposition in April.

    Unless there really was insider trading (and someone comes forward to prove it), I imagine HP will get out of this suit pretty easily.
    • Unless there really was insider trading

      The law is supposed to be very clear on this. If they used confidential information as the reason the stock is manipulated, then they are breaking the law.

      Now, does the State have enough hard evidence to prove this? It appears they have enough to at least try.

      The thing that disappoints me most is the shock that HP isn't such a fine corporate citizen. To borrow a phrase, HP is eating their seed corn. It's reasonable to assume the probability that other publicly trad
  • by hguorbray ( 967940 ) on Thursday November 30, 2006 @05:33PM (#17057454)
    As a former HP contractor who watched a once great company get dragged through the mud and watched hundreds of dedicated rank and file employees fall to the wayside on the deathmarch to the bottom line I can only say:

    It's about time that these arrogant jerks were accountable to someone other than the wall street analysts and to something other than the allmighty dollar.

    I was there from the time that Lew Platt's departure brought about the HP-Agilent split and Carly's reign of terror all the way through the Comapq HP merger and the Mark Hurd 'the beatings will continue until morale improves' era.

    HP employees are still among the worlds most talented and dedicated, but it's getting harder when the best and brightest are forced in to early retirement or have to help in the offshoring of their own jobs -I had to do that, and though I did my best it was an absolute disaster. But since they are currently beating Dell at whatever cost management has little incentive to do things any differently.

    -What's the speed of dark?
    • It's about time that these arrogant jerks were accountable to someone other than the wall street analysts and to something other than the allmighty dollar.

      Corporations are supposed to be sociopathic. They are supposed to put profit above all else.

      If you work for one, you are obliged to understand this. Indeed, you are even compensated for working for a sociopath: you get a variety of benefits that are not given to employees of smaller companies. And it's remarkably easy to terminate this arrangement an

      • Corporations are supposed to be sociopathic. They are supposed to put profit above all else.

        No, they are supposed to do the things they claim to do in their charter. Profit is part of it, but making it the only thing is hardly a duty.

      • so I would guess that you don't believe in ethical or socially resposible behavior by corporations?

        I'm glad you're not my boss....

        One of the things that myself and others admired about the old HP was its commitment to its customers and employees -Dave and Bill created a culture in which engineering innovation and customer service were paramount.

        I realize that this may hearken to a bygone and more chivalrous era -and I say that it's too bad.

        -What's the speed of Dark?
      • Corporations are supposed to be sociopathic. They are supposed to put profit above all else. If you work for one, you are obliged to understand this. Indeed, you are even compensated for working for a sociopath: you get a variety of benefits that are not given to employees of smaller companies. And it's remarkably easy to terminate this arrangement and never again have any dealings with them.

        Not clear on what you intend by that last line, so I'll ask: are you claiming it's easy to find a way to never w

    • "...have to help in the offshoring of their own jobs - I had to do that, and though I did my best it was an absolute disaster."

      If it ended in absolute disaster, then your part was done properly.
      • Not really, although that's a good joke

        It was management's fault.

        Their bean counters said they had to get this configuration support group's migration done in less than 9 months to save money.

        So they got space in the new HP center at Chennai India and hired a bunch of folks straight out of University to support complex system configurations and a configuration modelling/ordering system that had taken me, an experienced IT person almost a year and a half to completely figure out. On top of that these folks h
        • I was the sole IT person at my last place of work. The parent company decided they would provide all IT services remotely from the corporate offices, so I was given my pink slip and sent on my way. Monday morning, the servers stop. They call the corporate help desk and hear "We don't support those applications." The company grinds to a stop. A few months later, the newly promoted IT director leaves for a new company and takes all of his people with him, effectively ending the experiment. Two later, and they
  • by Anonymous Coward
    Lying is lying.
    • No it isn't. (Score:2, Insightful)

      by Anonymous Coward
      Lying isn't often a crime, and it isn't even always unethical. I lie to my wife when she asks how she looks. I lie to slashdoters by telling them I have a wife.

      Obtaining private information on false pretext on the other hand is a crime. Pretexting, while a somewhat silly word, is a far more accurate and descriptive term than lying and is definately preferable to it. It does not dimminish the seriousness of what they did, it emphasises it. Even if you were to pick a more commonly used word, there are better
      • by idlake ( 850372 )
        You're making a good point. But the correct word ought to be "deception", "fraud", or "misrepresentation". "Pretexting", on the other hand, is a weasel word.

        As far as you claiming to have a wife on Slashdot, you underestimate the harm you're doing: dozens of nerds are jumping off the roof thinking that they are failures because you have a wife and they don't.
  • What is this bullshit doublespeak term "pretexting?" So when a regular person does it it's called "fraud" or "lying", but when corporate executives do it it's called "pretexting"? It kind of makes it sound like some technicality, "oh, they were only pretexting, it's not like they were committing fraud".
    • Re: (Score:3, Insightful)

      by QuantumRiff ( 120817 )
      They should just use the term "Social Engineering". Or lying, or one of the dozen other terms that mean the same thing, but really, how is "Pretexting" to get confidential data from a company any different from using social engineering? They pulled a Kevin Mitnick, and that guy went to Jail, and was convicted for doing that!
      • by SeaFox ( 739806 )
        My problem with the term "social engineering" is it implies a certain amount of gullibility on the part of the victim.

        Lets say a person calls a customer service line, and identifies themselves with the phone number, name, and address of the account holder and then proceed to gather billing and service information about the actual customer. This information is all that was required to gain the account access (and for most cableco's this is all that is required). The represenetive has no way of verifying if t
        • Yes, but specific blame does not necessarily go with the term "social engineering." The fact that there are those holes is not the person doing the verification's fault, but rather the social environment that allowed that to happen. You could call the White House with Prez Bush's SS#, etc, but they still would not give you the codes to the nukes (well, hopefully, you never know with that crowd...:(

          -A
          • by SeaFox ( 739806 )
            You could call the White House with Prez Bush's SS#, etc, but they still would not give you the codes to the nukes (well, hopefully, you never know with that crowd...:(

            Oh we don't need to call them for that. The code may still be 00000000 [cdi.org].
    • Re:Doublespeak (Score:4, Insightful)

      by rajafarian ( 49150 ) on Thursday November 30, 2006 @06:14PM (#17058032)
      What is this bullshit doublespeak term "pretexting?"

      Yeah, that shit cracks me up. Just like what you and I would call bribes but the media and our government call campaign contributions.
  • I realize that one does not necessarily need to profit from or avoid losses to be guilty of insider trading but I have to imagine it really makes it harder to prove it when the stock price goes in the wrong direction after said trading. Is there any evidence of insider trading? What damage are the shareholders looking to recover? The stock has gained 10% or more since the 1st of sept...
  • A bit of disclouse here - I'm an HP guy. So I could be accused of bias when I say this is bullshit. But here goes:

    The share price has gone up since the scandal. It barely blinked while it was going on. What fucking idiot of a shareholder sues a company for "insider trading" when the share price is still going up?

    But wait, at the time the trades were made, the price had been inflated! You know they're inflated, because they had been going up every single month for 18 months straight! Erm, again, not too sure
    • by idlake ( 850372 )
      You know what - no-one outside of HP has been harmed.

      If this sets a precedent that it's OK for companies to lie in order to get information about their board or employees, then people have very much been harmed.

      But if you didn't notice, the *chairwoman* of a huge damn company lost her job. It will be costing her a fortune in legal fees

      Well, and she'll still be richer than 99.99% of the US population and she won't be doing any jail time. Why is that a good thing? I mean, she couldn't be trusted to be in th
      • "If this sets a precedent that it's OK" - what, because when someone gets very publically sacked from her job, everybody else thinks "hey, I guess there no problem then?"

        Incidentally, for the naive and innocent of you, lying is and always will be considered acceptable to get information (ask a journalist or a security expert). It's a standard investigative technique. Try watching a TV watchdog show where it is used to catch out corporations, or cowboy builders ripping off old ladies. And quite simply, the c
        • by idlake ( 850372 )
          lying is and always will be considered acceptable to get information (ask a journalist or a security expert)

          You're playing word games by hiding what amounts to fraud behind the term "lying". Obtaining personal records without authorization by misrepresentation is fraud, no matter who does it. It is not acceptable behavior for anybody.

          It's a standard investigative technique. Try watching a TV watchdog show where it is used to catch out corporations, or cowboy builders ripping off old ladies.

          That's a differ
          • That's a different kind of "lying" .. depends on the circumstances

            Just who's playing word games? Lying is not a crime - deal with it. Unlike your games with "it depends" etc, I stated quite plainly that HP commited identity theft, theft as in crime, and therefore it is appropriate that so many senior level people lost their jobs. How on earth does this imply I think it's acceptable? Stop accusing others of word games, when clearly you're quite happy to blatantly misrepresent another person's point of vie

            • by idlake ( 850372 )
              I stated quite plainly that HP commited identity theft, theft as in crime, and therefore it is appropriate that so many senior level people lost their jobs.

              Losing one's job is not punishment for a crime, it's an expression that one is not fit for the job anymore. That's also why there is no due process or "innocent until proven guilty" restriction on losing your job. HP would be perfectly justified in firing these people even if there were no criminal or civil charges against them--the bad press that has
              • Losing one's job is not punishment for a crime, it's an expression that one is not fit for the job anymore.

                Bollocks. Courts will typically take something like loss of employment into account during when assessing fines and sentences. No matter what job loss is an expression of, it is to all intents and purposes part of your punishment. You appear to forget that reasons for job loss can include being a scapegoat (or incompetent managers, or whistle blowers, etc). Do you generally have a tendency to be so

    • by mimio ( 151368 )
      I agree with you.

      A fellow HP employee
  • I suspect that most every CEO and board member in a large public corporation is liable for insider trading charges.

    and the rest of use don't stand a chance until every single one of these cases is rooted out.

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