HP CEO: Chairwoman Dunn's Resignation Effective Immediately

Hewlett-Packard Co. (HPQ) Chairwoman Patricia Dunn resigned Friday, effective immediately, in the wake of the company's ill-fated investigation of boardroom media leaks.

Announcing the resignation, HP Chief Executive Mark Hurd called the tactics used by the company's outside investigators "very disturbing."

"I extend my sincerest apologies to those journalists who were investigated and to everyone who was impacted," he said at his first news conference since the scandal erupted Sept. 6.

Determined to protect confidential board discussions, HP hired investigators who impersonated board members, employees and journalists to obtain their phone records. The detectives also surveilled an HP director and concocted an e-mail sting to dupe a reporter an online technology site.

HP had earlier said Dunn, who authorized the leaks investigation, would step down from the chair in January and be replaced by Hurd, but remain a member of the board. Hurd said he has succeeded Dunn as chairman and will retain his positions as president and CEO.

After dropping 5 percent Thursday amid reports that Hurd knew more about the skullduggery than previously thought, HP stock rose 24 cents Friday to close at $35.11 on the New York Stock Exchange. After Hurd's news conference, shares gained 14 cents in extended-session trading.

In recent days, Hurd has faced increased questions about what he knew of HP's efforts to ferret out a boardroom leak.

Hurd — nearly 18 months into the job — made his public statement as Wall Street worried whether the CEO would become ensnared in the scandal, which had already led to the resignation of two other directors and has spawned criminal investigations.

California Attorney General Bill Lockyer and several federal agencies are investigating whether HP and its executives broke any laws in their crusade to find a media leak on the company's board.

Hurd so far isn't among the group of HP insiders that Lockyer expects to charge, spokesman Tom Dresslar said Friday. But the attorney general is still examining Hurd's role in the scandal. "We are not ruling anybody out in terms of criminal culpability, Dresslar said.

A congressional panel also has scheduled a Sept. 28 hearing to grill HP's leaders and lawyers about the company's handling of the probe.

Apparently spurred by Thursday's developments, Hurd now plans to appear at the hearing being held by the House Energy and Commerce Committee. Dunn and General Counsel Ann Baskins, who also played a central role in the spying program, previously accepted the panel's invitation to appear.