Hewlett-Packard Chairman Dunn Resigns

Hewlett-Packard's chairman Patricia Dunn has resigned effective immediately, as pressure mounts on the computer maker over the methods it used to investigate boardroom leaks.

HP chief executive Mark Hurd was named chairman in Dunn's place, amid a scandal that has tarnished the reputation of one of Silicon Valley's most venerable companies.

Hurd told reporters the company still did not have all the information and was still looking into it.

"To move forward, we believe it is in the company's best interest that she (Dunn) now step aside given the distraction her presence on our board continues to create," HP's board said in a statement.

Dunn spearheaded an internal probe into boardroom leaks dating back to 2005. The company is now under investigation by California's attorney general over whether it employed illegal tactics in the probe, such as using false identities to obtain phone records of employees and reporters.

HP has admitted that investigators hired to uncover the source of the leaks posed as board members, employees and journalists to obtain phone call records.

HP shares, which have been largely unaffected as the scandal grew but fell about 5 percent on Thursday on speculation that Hurd might have been closer than thought to the investigation, rose 1 percent in extended trade following Dunn's resignation on Friday.

"It's tough to say that (Hurd) is definitely in the clear," said Shaw Wu, an analyst at American Technology Research. "I'm not sure what to make of it. I don't think we have all the answers. At minimum, this investigation is still a distraction for the company."

Hurd, who will appear next week at a House subcommittee hearing on HP, said he did not expect the scandal to affect HP's business.

"I don't expect anything to come out," Hurd said. "The operations of HP will remain untouched by this whole thing."