FORMER HP EXEC. PLEADS GUILTY IN TRADE SECRETS CASE

[Anonymous]

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.

[Author]

July 14, 2008 at 2:07 PM