FORMER HP EXEC. PLEADS GUILTY IN TRADE SECRETS CASE

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FORMER HP EXEC. PLEADS GUILTY IN TRADE SECRETS CASE

 user 2008-07-14 at 2:07:49 pm Views: 52
  • #20102

    http://news.yahoo.com/s/ap/20080711/ap_on_hi_te/hp_ibm_trade_secrets;_ylt=AlOG.DLtHpbwxTTnL_VA.sIjtBAF
    Fmr HP exec pleads guilty in trade secrets case
    SAN
    JOSE, Calif. – An executive who worked at IBM Corp. for nearly a decade
    pleaded guilty Friday to stealing trade secrets about the company’s
    pricing and trying to pass them off to his superiors at rival
    Hewlett-Packard Co. when he took a job there.Atul Malhotra, 42, faces
    up to 10 years in prison and a $250,000 fine on the single count of
    theft of trade secrets, prosecutors said Friday. Malhotra entered his
    plea to the charge in U.S. District Court in San Jose, where sentencing
    is scheduled for Oct. 29.Malhotra worked from 1997 to 2006 as a
    director of sales and business development in the Armonk, N.Y.-based
    IBM’s global services division.

    The division is one of IBM’s
    most lucrative, typically making up more than half of IBM’s total sales
    and a third of its pretax profit.Investigators say two months before
    Malhotra took a job as a vice president in HP’s imaging and printing
    services division, he asked for confidential IBM data about product
    costs and materials. Shortly after he arrived at Palo Alto-based HP in
    2006, prosecutors say, Malhotra sent e-mails to two of his superiors
    with the confidential data attached.Prosecutors said Malhotra claimed
    in the e-mails that the data would give HP’s sales teams an edge over
    IBM in determining pricing on prospective deals.

    HP and IBM
    cooperated with the investigation, prosecutors said.HP said it detected
    the activity, fired Malhotra and turned the information over to law
    enforcement. His employment at HP lasted five months. IBM declined to
    comment on the case.Malhotra’s defense lawyer, John Vandevelde, said he
    plans to ask the court to consider probation instead of jail time for
    his client.”The trade secrets involved had limited value and Mr.
    Malhotra’s error in sharing them in response to requests from his
    bosses at Hewlett-Packard had no impact on any business transactions,”
    Vandevelde said in a statement.