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HP Businesses Government The Courts United States News Politics

HP Skates Away From SEC Charges 80

Posted by Zonk from the that-is-some-good-lawyering-right-there dept.
theodp writes "The SEC has dropping charges against HP, in return for some small concessions. The company was originally charged with improperly depriving investors of important information, violating the public reporting requirements of the Securities Exchange Act, and failing to disclose the full impact of an out-of-control press leak investigation. In return for the dropped charges, the computer maker simply agreed to cease and desist from doing similar acts in the future, without admitting or denying having done so in the past. 'HP acted in what it believed to be a proper manner,' said the company in a press release."
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HP Skates Away From SEC Charges More

HP Skates Away From SEC Charges

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  • "The SEC has dropping charges against HP..."

    Slashdot does have editors, right?

    Right?

  • Thems with the deepest pocketses winses! (Score:3, Informative)

    by Chas ( 5144 ) on Thursday May 24, 2007 @01:37PM (#19257441) Homepage Journal
    Yes my precious!

    *** Beware. Disgust vent system engaged. ***

  • yep (Score:3, Insightful)

    by mastershake_phd ( 1050150 ) on Thursday May 24, 2007 @01:38PM (#19257471) Homepage
    Step 1: Become a Corporation. Step 2: Commit a crime. Step 3: Profit! Step 4: Dont go to jail. and maybe.. Step 5: Write a book about it. Step 6: Profit!

    • Re: (Score:1, Insightful)

      by BosstonesOwn ( 794949 )
      Yeah only 1 problem, you forgot step 5b write a check for each one of the people you need to buy to make these "issues" go away.

    • Your forget Step 3.5 (Score:1, Insightful)

      by Anonymous Coward
      Step 3.5 use that profit to give congress some bribes, err I mean campaign contributions.

  • The SEC has dropping charges against HP
    Perhaps the submitter meant depth charges [wikipedia.org], which were also known as dropping mines. Was this a Freudian Slip, linking HP, their stock, and a submarine? :)

  • Disgusting... (Score:5, Interesting)

    by packetmon ( 977047 ) on Thursday May 24, 2007 @01:43PM (#19257543) Homepage
    You know, it's disgusting how this country has become for a dollar....

    Phillips, TRW, and Koch have more in common than a history of repeatedly violating workplace and environmental laws. They also rank among the nation's largest government contractors. Between 1995 and 2000, the three corporations received a combined total of $10.4 billion in federal business-at the same time that regulatory agencies and federal courts were citing the companies for jeopardizing the safety of their employees, polluting the nation's air and water, and even defrauding the government.

    That's not supposed to happen. Federal contracting officers are charged with reviewing the record of companies that do business with the government and barring those that fail to demonstrate "a satisfactory record of integrity and business ethics." But officials are given no guidelines to follow in making such decisions, and there's no centralized system they can consult to inform them of corporate wrongdoing. As a result, a government report concluded in 2000, those responsible for awarding federal contracts are "extremely reluctant" to take action, even when they are aware of violations. And in the rare instances when the rule is enforced, it is almost always employed against small companies with little clout in Washington.

    There is little incentive for any company to follow laws of the law. Why should they when they can get a slap on the wrist and a wink of the eye... "You don't go doing that again now you here... By the way, we really like those HP notebooks and I was thinking about my son's classmates". Jesus christ this country is a scam in itself
  • Maybe they need to invest in some plastic bags to put those droppings in next time. Or I suppose they could flush it down the "tubes" where the rest of it is.

  • better headline (Score:2, Interesting)

    by einer ( 459199 )
    HP believes pretexting is "proper." HP believes that pretexting, something that if I were to do to HP would certainly NOT be considered "proper" is perfectly acceptable.

    Keep in mind that it wasn't long ago that a bill legalizing pretexting was pushed by the RIAA [arstechnica.com].

    Please stop buying HP stuff. Please stop buying stuff from companies that have a political axe to grind against their consumers. Please stop buying stuff from companies that consider consumers a silent, renewable, god given, right to exploit reso

    • Re:better headline (Score:5, Informative)

      by sjwaste ( 780063 ) on Thursday May 24, 2007 @02:22PM (#19258205)
      Moron. This settlement had nothing to do with pretexting. Read the SEC release before posting. Mods who bumped this to a 5, do a little bit of reading yourselves.

      HP was charged with a '34 Act violation because they didn't report WHY a director (Perkins) resigned, only that he did. They were required to report WHY he resigned because he resigned over a disagreement with corporate policy, which must be disclosed per the '34 Act. He could've resigned because he disagreed with their pricing of toner, and it would've had to have been reported because:

      Federal securities laws require a public company to disclose - by making a public filing with the Commission - the circumstances of the disagreement if a director resigns because of a disagreement with the company on any matter relating to its operations, policies or practices.

      Yes, this happened in relation to the pretexting scandal, but that's not why the SEC sought enforcement. Therefore, HP's claims that it thought it was acting "lawfully" are not in regard to pretexting, but in regard to the disclosure of a director's resignation and what amounts to the quote above. They thought it didn't fit that definition, stupidly and blatantly incorrect, might I add, but it had nothing to do with them believing pretexting was a lawful action. That wasn't the question to be decided here.
    • that's all you need to know.

  • In summary... (Score:5, Funny)

    by RandoX ( 828285 ) on Thursday May 24, 2007 @01:50PM (#19257671)
    ...Go ahead and break the law. We'll let you off if you promise not to do it again.

    I hope they at least made them pinky-swear.

  • So, promise not to break the law... (Score:3, Insightful)

    by surfingmarmot ( 858550 ) on Thursday May 24, 2007 @01:51PM (#19257679)
    ...and escape all punishment for having knowingly and egregiously broken the law before the promise. From the SEC press release: "Without admitting or denying the Commission's findings, HP consented to an order that it cease and desist from committing or causing violations of these provisions." Oh, wait I get it! Knowing something is illegal and doing it anyway is not grounds for punishment as long as you, once cuaght, just promise to cease and desist violating the law thereafter. Defendant: "Gosh Your Honor. If, despite the prosecution's proving I broke the law and robbed a bank, I neither admit nor deny doing it and further I promise to cease and desist robbing banks in the future, can I just go free now?" Judge: "Certainly. I think you've learned your lesson. Defendant dimissed. Son you are free to go" Corporations and the rich are held to far lower standards than the rest of us.

    • Re: (Score:3)

      by sjwaste ( 780063 )
      ...and escape all punishment for having knowingly and egregiously broken the law before the promise. From the SEC press release: "Without admitting or denying the Commission's findings, HP consented to an order that it cease and desist from committing or causing violations of these provisions." Oh, wait I get it! Knowing something is illegal and doing it anyway is not grounds for punishment as long as you, once cuaght, just promise to cease and desist violating the law thereafter. Defendant: "Gosh Your Hono

      • Re:So, promise not to break the law... (Score:5, Insightful)

        by Crazy Man on Fire ( 153457 ) on Thursday May 24, 2007 @02:51PM (#19258687) Homepage
        Hurting innocent people, huh? Why shouldn't investors share responsibility for the actions of the corporations in which they invest? This is exactly the mindset that got us into this corporate ethics mess in the first place. If the shareholders aren't responsible, then who is? As a part owner of a corporation engaging in illegal activities, you aren't an innocent. If the stock value declines as a result of illegal activities of the corporation, stockholders deserve to lose money. Otherwise, there's no incentive for the corporations to behave responsibly and no incentive for investors to avoid corporations that engage in illegal/unethical practices.

        • Re: (Score:2)

          by rhizome ( 115711 )
          Why shouldn't investors share responsibility for the actions of the corporations in which they invest?

          Because any rules that hold down profit margins are effectively unconstitutional.
          • Only if you believe that corporations are people with inalienable rights (they seem to think they are, but they are mistaken.) Besides, there are literally thousands of laws on the books that negatively affect profit margins. Environmental regulations for one. Sarbanes-Oxley for another. The list goes on and on and on, and part of why big manufacturers (and not so big ones) are moving manufacturing overseas is because other countries place lesser burdens on business.

            Now, some of those laws are necessary,

        • Re: (Score:2)

          by sjwaste ( 780063 )
          Hurting innocent people, huh? Why shouldn't investors share responsibility for the actions of the corporations in which they invest? This is exactly the mindset that got us into this corporate ethics mess in the first place. If the shareholders aren't responsible, then who is? As a part owner of a corporation engaging in illegal activities, you aren't an innocent. If the stock value declines as a result of illegal activities of the corporation, stockholders deserve to lose money. Otherwise, there's no incen
    • I think the point is, that they didn't knowingly break the law. In fact, they thought they were acting lawfully. It should at least be a mitigating factor, and considering the whole circumstance, the SEC's response seems appropriate.

      From reading the two links, (IANAL and I haven't read the specific rule) it seems that this was a grey area for the rule. The rule is that if a board member quits because he disagrees with the companys operations/policies/practices, the company must explain the reason for
  • Time to feed HP to Wu's pigs. [wikipedia.org]
  • Hey, if you have money, feel free to break the law all you want, so long as you don't physically hurt someone. And if you do, I'm sure your prison sentence can get reduced for good behavior (ie. showing up to court on the correct date).
  • They had a leak. they investigated the leak. They presented findings to the board. One board member objected to the investigation and presentation process and resigned. They didn't disclose the full details of the resignation to the SEC.

    It's not like they poisoned Bhopal, killed a bunch of pets, or murdered everyone in Hama.

    Ohhhhhhh. I get it. Big company. Definitely deserving of all the flea bites the /. fanboy readership can inflict.

    • Re: (Score:2)

      by sjwaste ( 780063 )
      Finally, someone who actually read what the issue actually was. I'd mod you up but I've already replied to other posts.

      This actually isn't a very serious offense. HP was probably a bit dumb in misinterpreting the regulation (or forgetting it existed), especially since securities laws tend to interpret broadly because of the overarching goal of investor protection, but it's not terrible.
  • Microsoft's monopoly case was just as toothless. A relatively measly fine and promise to be good in the future. Exception, for corporate regulations to be effective, judgments have to be punitive and not regulatory. It simply takes too much of the state's resources and time to say "don't do it again." There's no deterrence when a CEO knows it'll be at least 4-5 years before a conviction (probably a wrist slap) comes down the pipe and that the state doesn't have the time or money to go after everyone. H

  • the computer maker simply agreed to cease and desist from doing similar acts in the future... 'HP acted in what it believed to be a proper manner,' said the company in a press release.
    We did the right thing, but we promise we'll never do that again.
  • Jetted away for HP I think.
  • How do you "cease" something that you don't admit to doing?

  • First the FCC and now the SEC. (Score:3, Informative)

    by Irvu ( 248207 ) on Thursday May 24, 2007 @03:14PM (#19259099)
    I remember back in the 80's when people first noticed that the FCC was serving the interests of companies more than the populace. Everything else that has followed since from fighting for the rights of large media companies to merge to seeking to suppress internet content at the behest of AOL Time Warner started then with Regan's appointees. Now the FCC openly behaves as a tool of the conglomerates. Or in the case of the illegal wiretapping [wikipedia.org], a tool of the NSA.

    A similar lack of complaint was heard when the food and drug administration reevaluated aspertame for the third time and declared it safe despite their own warnings to the contrary see here [wikipedia.org]. Thanks again Donald Rumsfeld.

    Then the Food and Drug administration recently was accused of stepping down enforcement of many complaints and 'streamlining' the process of approval for the drug companies.

    Now this. Realistically speaking I would hope that sooner or later events like this, you know large companies committing fraud and spying on people for money, lying, etc. and being given only a slap on the wrist, would say piss people off so much that they would Write their Congressional Representative [house.gov], and Their U.S. Senator [senate.gov], and even The President [whitehouse.gov]. A few e-mails saying, either this is a government of by and for the people or we'll vote for someone else. A few e-mails saying, I pay my taxes why are they being spent to harm me? A few e-mails just reminding them that we are paying attention. Lacking that they can do whatever they want and we're no longer the greatest nation on earth.

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