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By Greg Sandoval, 24 May 2007 08:48

NEWS

HP and US regulators have settled allegations concerning an investigation the company launched last year to uncover a boardroom leak.

HP "failed to disclose the reasons" that a board member had resigned, according to a statement released by the Securities and Exchange Commission (SEC). The board member, Thomas Perkins, gave up his director's position due to his objections over the company's investigation into leaks to the press. Federal law requires public companies to fully disclose the reasons why a director leaves.

Michael Holston, HPs executive vice president and general counsel, said: "HP acted in what it believed to be a proper manner. However, we understand and accept the SEC's views and are pleased to put this investigation behind us."

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As part of the settlement with regulators, HP agreed to a cease-and-desist order but neither admitted nor denied any wrongdoing as part of the administrative proceeding, the SEC said.

Marc Fagel, associate regional director of the SEC's San Francisco office, said: "The company viewed this as a personal dispute between a director and the chairman and opted to stay silent. But the failure to make the required disclosures deprived investors of important information about the management of the company by its board."

Since word of HP's controversial internal investigation - which included gathering private phone records from journalists (including three from silicon.com sister site CNET News.com), board members and several employees - became public in September 2006, the company has worked to put the incident behind it.

Most of the HP employees involved in the case are no longer with the company, including former chairman Patricia Dunn. In March, a judge dismissed felony charges against Dunn and others who took part in the HP probe.

Greg Sandoval writes for CNET News.com