HP chairwoman Patricia Dunn initiated the investigation in early 2005, following a series of leaks of confidential company information to the press. An external security firm was brought in to find the source of the leaks. By June, it is believed that the security consultants had begun 'pretexting' — pretending to be someone else in order to access confidential information.
The investigation resumed again earlier this year, with a final report made to the HP board in May. In addition to 'pretexting', the investigation team created an email account with a fictitious name, used to send 'tracer' emails to a journalist. Physical surveillance of an HP board member, his spouse and a journalist was also conducted.
At the May meeting, Dunn identified the leaker as board member George Keyworth, prompting the angry resignation of fellow director Thomas Perkins, whose departure sparked immense media coverage of the investigation, eventually culminating in Dunn's resignation last month.
The scandal has hurt HP's image badly. The California attorney general has already filed criminal charges, while a shareholder lawsuit has also been brought. Of particular concern to HP's shareholders is the role played by CEO Mark Hurd, who is widely credited with leading the company's renaissance after the departure of Fiorina.
It appears that Hurd played a larger role than was initially thought; indeed he has confirmed that he approved the probe, but not the methods that were employed.
Amid all this, HP's stock price has — remarkably — held firm, even trending upward over the last few months. Still, it seems clear that HP's PR woes are not over, particularly now Fiorina has hit the publicity trail with a vengeance, touting a new memoir that is highly critical of her ex-employer.
