H-P Insiders Charged

An arrest warrant was issued for Hewlett-Packard's(HPQ Quote) former Chairwoman Patricia Dunn Wednesday, less than two weeks after she resigned amid a scandal involving a company-sponsored spying campaign.

California Attorney General Bill Lockyer brought felony charges against Dunn and four other players involved in the affair, including a senior lawyer at H-P who has also resigned.

The charges, which carry a maximum prison sentence of three years, were widely expected, but nonetheless mark a stunning turn of events for the former chairwoman of one of the world's largest technology companies.

"One of our state's most venerable corporate institutions lost its way as its board sought to find out who leaked confidential company information to the press," Lockyer said in a statement. "In this misguided effort, people inside and outside H-P violated privacy rights and broke state law."

H-P disclosed details last month of a concerted spying campaign to uncover the source of media leaks.

The company acknowledged that investigators hired by H-P accessed the personal phone records of board members, employees and journalists by impersonating those individuals -- a practice known as "pretexting."

Since then, details have emerged of a mind-boggling spying operation in which investigators dug through trash bins, surreptitiously staked out the house of H-P board members and sent emails with tracing mechanisms to one newsroom.

Shares of H-P were down 17 cents at $37.85 in extended trading. H-P's stock finished the regular session up 60 cents, at $38.02, a 52-week high.