HP’s sleuthing under investigation

Dan Grech Sep 7, 2006

SCOTT JAGOW: In the business world, some things are against the law. Some are legal but unethical. And then there’s just plain dumb. California’s trying to figure out where some activity at Hewlett-Packard might fall. The state has launched an investigation into HP hiring private detectives to spy on its own board members. Marketplace’s Dan Grech reports.

DAN GRECH: California Attorney General Bill Lockyer says he’s not sure it was illegal for detectives to pose as HP board members to access their phone records, a practice called pretexting. He did, however, call the corporate intrigue “colossally stupid.”

Rob Enderle is principle tech analyst at the Enderle Group. He says there’s no federal law that bans pretexting. But the practice has raised red flags in California.

ROB ENDERLE:“The action of pretexting is, in effect, stealing somebody’s identify to gain access to their records. And so it certainly isn’t something that a company like Hewlett-Packard wants connected to their name.”

HP has its plate full. The Securities and Exchange Commission is looking into news leaks from the HP board that may amount to a kind of insider trading. Enderle says that one’s clearly against the law.ENDERLE:“That could land you in the Martha Stewart memorial room at a federal facility.”

I’m Dan Grech for Marketplace.

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