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Ex-HP veep pleads guilty to passing on IBM trade secrets

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A former Hewlett-Packard executive has pleaded guilty today for attempting to pass trade secrets from his previous employer, IBM.

Atul Malhotra is charged with a single count of theft of trade secrets, and faces up to 10 years in prison, a $250,000 fine, and three years of supervised release. He entered his plea at the US District Court in San Jose, California.

Between 1997 and 2006, Malhotra worked as director of sales and business development within IBM's Global Services Division.

Prosecutors claim about two months before he left for a new job as vice president of HP's imaging and printing services, he requested an IBM internal pricing document called CC Calibration Metrics.

According to court documents, the material was marked "IBM Confidential," on each page and Malhotra was also specifically instructed to not distribute the sensitive information.

Shortly upon arriving at HP, Malhotra allegedly sent the data in an e-mail to an unnamed senior veep at HP with the subject line, "For Your Eyes Only." Two days later, Malhotra sent a similar e-mail containing the data to another unnamed HP executive.

HP said it took swift action against Malhotra's alleged misconduct.

"HP detected this activity, conducted an internal investigation, terminated Malhotra from his employment, and self-reported the activity to all appropriate enforcement agencies and to IBM. HP has cooperated fully with the government’s investigation," said the company in a statement.

Sentencing is scheduled for October 29.®

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