US court clears Mike Lynch of fraud charges

Lynch, who faced 15 counts of fraud, says he is ‘elated’

Mike Lynch, who was accused of defrauding HP over the value of his company Autonomy when the tech giant purchased it in 2011, has been cleared by a Californian court.

Lynch co-founded Autonomy in 1996, growing it so successfully he was likened to a British Bill Gates. He sold Autonomy to HP in 2011 for $11.1 billion, the largest ever acquisition of a UK business at the time.

Shortly after, though, HP began to raise red flags. Lynch left the company after less than a year. The HP CEO who oversaw the deal, Léo Apotheker, was dismissed. Then, in November 2012, HP wrote down Autonomy's value by $8.8 billion, alleging that Lynch and his CFO Sushovan Hussain had cooked the books to make the company seem more profitable than it was.

Hussain was jailed for five years in 2019 (he was released in January this year), as well as being fined upwards of $10 million. Lynch's case, however, has dragged on, culminating in an extradition to the USA in May last year.

Lynch faced 14 counts of wire fraud and one of conspiracy, a securities fraud charge having been dropped earlier.

He testified himself as the final witness, insisting that Autonomy was not fraudulent, though admitting it was also "not perfect."

Lynch claimed ignorance of the company's daily business operations or its accounting practices. He blamed irregularities on other executives and employees, claiming he often delegated tasks.

The prosecution called more than 30 people as witnesses, though many had difficulty accurately remembering the details of a case now nearly 15 years old.

A jury concluded that Lynch was not guilty, in response to which he said he was "elated."

"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."

Lynch's attorneys, Christopher Morvillo and Brian Heberlig, said the decision was a "resounding rejection" of the claims against their client.

Computing says:

HP purchased Autonomy in the same year I started writing about the tech industry. I really wasn't sure the case would ever end, but it's nice to draw a line under the Lynch side of things (although HPE is still seeking damages against him following a British civil case).

Although Lynch and the rest of the Autonomy leadership may bear some responsibility, the attention must now refocus on HP and its decision to rush the acquisition and due diligence.