Further instability hits behavioural targeting advertiser Phorm: its four board members Stephen Meyer, Virasb Vahidi, David Dorman and Christopher Lawrence have quit “with immediate effect”. In a statement, Phorm said the four “will take this action as a result of differences with (CEO Kent) Ertugrul (pictured) as to the management and future direction of the company”.

Vahidi is also relinquishing his COO role. Former Coca-Cola president Heyer only joined in September. In through the door in their place come former Conservative chancellor Norman Lamont, Broadband Stakeholder Group chairman Kip Meek, Fairfax Investment Bank chairman Stefan Allesch-Taylor and investment management firm Gordian Knot’s MD Stephen Partridge-Hicks, each as non-executive directors.

Phorm’s H108 losses ballooned from $16.3 million (£10 million) to $24.7 million (£15.1 million) and, despite raising £32 million in March, it needs some serious income quite soon. Things looked bright back in February when three ISPs, Virgin Media, TalkTalk and BT signed up to join the platform, but since then only BT (NYSE: BT) has actually trialled the targeting technology; Virgin is awaiting the results and others potential partners like Guardian.co.uk and Orange have simply walked away.

Update: Phorm’s director of corporate and internet communications Alex Laity has been in touch to add some more details on the changes. Though admitting that Phorm faces challenges, Laity denies that Phorm was facing further instability and said “there certainly isn’t instability when you appoint four excellent individuals to a Board. You don’t just get Kip Meek, Lord Lamont etc to join a Board at the drop of a hat”. On the possible legal action, Laity stressed that Hanff wasn’t bringing a suit but has complained to the CPS in the hope that the Director of Public Prosecutions brings a case. On the fiscal side, Laity said: “We are comfortable with our cash position as we have a prudent financial strategy.” One other result of the changes is that the company’s board will be based in London instead of the US and will be able to meet more regularly.

Meanwhile today, the Crown Prosecution Service is looking in to whether BT and Phorm conducted their initial 2006 and 2007 trials unlawfully. Whilst the Department for Business, Enterprise and Regulatory Reform has said Phorm is legal providing data is anonymised and users can opt out, questions have lingered over the previous trial. A police investigation found no wrongdoing under the Regulation of Investigatory Powers Act (RIPA), but now privacy campaigner Alex Hanff has brought a private suit that the CPS is looking in to, Telegraph.co.uk reports.

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