That's the real issue. Is this a couple of nut jobs or does this represent the company culture? If it's the former, you're probably okay as long as the nuts depart. If this is the company culture, then you wonder what other corners might be getting cut ("If the board can ignore the law, it's probably okay if I fudge these benchmarks").

HP's a company with an honorable past. The fact that the company's Ethics officer apparently had some part in this surveilance doesn't bode well for its future.