One of the most fundamental purposes of HR is to hear employee complaints, particularly legal ones and to get them solved to both moral and legal satisfaction. It sounds like this HR department did everything exactly backward by focusing on hiding problems rather than addressing them, and they would have gotten away with it too if it weren't for those meddling bloggers.
Assuming the events happened as described, the fact that the manager was not immediately terminated makes the CEO directly culpable for illegal behavior.
