[JURIST] Hewlett-Packard [corporate website] reached a $14.5 million settlement [settlement, PDF] agreement with California Attorney General Bill Lockyer [official website] on Thursday in an unfair business practices suit [civil complaint, PDF] stemming from HP's allegedly fraudulent attempts to obtain certain phone records, a practice known as "pretexting." Lockyer "commend[ed] the firm for cooperating instead of stonewalling" and announced [press release] that $13.5 million of the settlement would be used for privacy rights investigations in state and local cases. The remainder will pay for civil penalties, investigations, and other costs.

Since September, HP has been embroiled in an elaborate corporate spying scandal. In order to discover the source of boardroom leaks, the company allegedly hired outside detectives to call phone companies, posing as executives and reporters in attempt to obtain phone records. In November, former chairwoman Patricia Dunn [Forbes profile], former ethics officer Kevin Hunsaker [BusinessWeek backgrounder], and outside private investigators Ronald DeLia, Matthew DePante and Bryan Wagner pleaded not guilty [JURIST report] in Santa Clara County Superior Court [official website] to felony charges [felony complaint, PDF; JURIST report] stemming from their roles in the corporate spying scandal [JURIST news archive]. Dunn resigned [JURIST report] in September before testifying at a hearing [JURIST report] before the US House Energy and Commerce Committee [official website], during which she admitted that she was aware of the plan, but was also told the actions were legal by corporate attorneys. AP has more.