[JURIST] A former vice president for Hewlett Packard (HP) [corporate website] pleaded guilty [DOJ press release] Friday to one count of theft of trade secrets [18 USC s. 1832 text] for giving HP protected information he obtained while working for IBM [corporate website]. Atul Malhotra said in his plea that before leaving IBM, he requested and received information on IBM's pricing and marketing strategies, which he then e-mailed to two HP executives during his employment there. HP spokeswoman Emma McCulloch said [Bloomberg report] that the company fired Malhotra after an internal investigation into the incident. Prosecutors formally charged [indictment, PDF] Malhotra last month, and sentencing is scheduled for October 29. He could be sentenced to up to 10 years in prison, a $250,000 fine and three years of supervised release. Reuters has more.
The Department of Justice said that HP cooperated fully with the investigation, but the company has been under heavy legal scrutiny recently. In November 2007, HP subsidiary Mercury Interactive settled [press release; JURIST report] derivative lawsuits regarding the alleged backdating of stock options. In March, a California judge dismissed felony charges [JURIST report] against four defendants who pleaded guilty to misdemeanors in the HP pretexting scandal [JURIST news archive]. In December 2006, HP settled an unfair business practices suit [JURIST report] brought by California Attorney General Bill Lockyer for $14.5 million. The backdating of Mercury option grants occurred before HP's acquisition of the company, but HP asserted that all liabilities for the backdating scandal would be handled without decreasing the value of HP's stock.