Former Autonomy CEO Mike Lynch was acquitted on Thursday of all 15 charges of fraud linked to the $11.1 billion sale of his company to Hewlett-Packard (HP) in 2011.
The British tech mogul’s trial began in March, following a lengthy fight over his extradition from the UK to the US. A jury in San Francisco found him not guilty on all counts.
First charged in 2018, Lynch faced accusations of inflating Autonomy’s sales figures ahead of its sale, misleading regulators, and deceiving HP. The deal was the largest-ever takeover of a British technology business at the time.
The verdict brings an end to a 13-year legal battle that has seen Lynch’s name become synonymous with controversy.
After his acquittal, Lynch expressed his relief: “I am elated with today’s verdict and grateful to the jury for their attention to the facts over the last 10 weeks. My deepest thanks go to my legal team for their tireless work on my behalf. I am looking forward to returning to the UK and getting back to what I love most: my family and innovating in my field.”
HP wrote down billions of dollars shortly after acquiring Autonomy, claiming it had uncovered severe accounting irregularities. Lynch, however, maintained his innocence, stating he had little to do with the company’s day-to-day business dealings or its accounting practices.
Initially charged with 16 counts, including wire fraud and conspiracy, one charge of securities fraud was dropped during the trial.
Lynch’s attorneys, Christopher Morvillo and Brian Heberlig, hailed the verdict as a “resounding rejection” of the government’s “profound overreach.” “The evidence presented at trial demonstrated conclusively that Mike Lynch is innocent,” they said.
“This verdict closes the book on a relentless 13-year effort to pin HP’s well-documented ineptitude on Dr. Lynch. Thankfully, the truth has finally prevailed.”
What happened, the timeline
It all started with the acquisition of Autonomy Corporation, a British software company, by Hewlett-Packard (HP) in 2011.
The deal, valued at $11.1 billion, was the largest-ever takeover of a British technology business at the time.
Here’s a detailed look at the key events leading up to and following the acquisition:
The Acquisition
2011: HP acquired Autonomy for $11.1 billion, aiming to bolster its software business. Autonomy was known for its innovative software that could analyze large amounts of unstructured data.
The Strategy: HP’s strategy was to transform itself from a traditional hardware company into a more diversified tech company with a strong emphasis on software and services.
Controversy and Allegations
Post-Acquisition: Shortly after the acquisition, HP claimed it had discovered serious accounting irregularities at Autonomy. HP alleged that Autonomy had inflated its financial statements to mislead investors and inflate the company’s value.
2012 Write-Down: HP wrote down $8.8 billion of Autonomy’s value, attributing more than $5 billion of this to accounting improprieties, misrepresentations, and disclosure failures by Autonomy’s management prior to the acquisition.
Legal Actions:
HP filed lawsuits against Mike Lynch and other former Autonomy executives, accusing them of fraud and seeking to recover damages.
Lynch maintained his innocence, arguing that HP’s claims were a result of its own mismanagement and inability to successfully integrate Autonomy.
Legal Proceedings
2018 Charges: The US Department of Justice charged Mike Lynch with 16 counts of fraud, including wire fraud and conspiracy. The charges alleged that Lynch and other executives had intentionally misled investors and regulators about Autonomy’s financial health.
Extradition Battle: Lynch fought extradition from the UK to the US, arguing that he should face any legal proceedings in the UK where the company was based.
San Francisco Trial: In March 2023, Lynch’s trial began in San Francisco. During the trial, one charge of securities fraud was dropped, leaving Lynch to face 15 charges.
Acquittal
June 2024 Verdict: On June 6, 2024, a jury in San Francisco found Lynch not guilty on all counts. The jury’s decision marked the end of a protracted legal battle that had lasted over a decade.
Lynch’s Reaction: Lynch expressed relief and gratitude following the verdict, thanking the jury for their diligence and his legal team for their tireless efforts. He looked forward to returning to the UK and resuming his work in the tech industry.