Former Autonomy CEO Mike Lynch issued a statement Thursday following his acquittal of criminal charges, ending a 13-year legal battle with Hewlett-Packard that became one of Silicon Valley’s largest fraud cases. . He was accused of falsely inflating the British startup’s revenue before the sale of Autonomy to HP for $11 billion in 2011.
Commenting on the acquittal, Lynch (pictured above, left, when appearing at TechCrunch Disrupt) said in his statement: “I am elated by today’s verdict and grateful to the jury for their attention to the facts over the last few ten weeks. My deepest thanks 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.”
After a 12-week trial, the businessman was acquitted of 15 counts of fraud and conspiracy against him in connection with the 2011 acquisition.
Lynch’s victory is notable in light of the fact that in the US, in fiscal year 2022, only 0.4% of federal criminal cases ended in trial and acquittal, according to the Pew Research Center, and only 12% of all electronic fraud processes. resulted in acquittal.
Christopher Morvillo and Brian Heberlig, Lynch’s legal counsel, added in a statement: “We are delighted with the jury’s verdict, which reflects a resounding rejection of the government’s profound overreach in this case. The evidence presented at trial conclusively demonstrated that Mike Lynch is innocent. This verdict closes the book on a relentless 13-year effort to blame Dr. Lynch for HP’s well-documented ineptitude. Fortunately, the truth eventually prevailed. We thank Dr. Lynch for his trust during this ordeal and hope that he can now return to England to resume his life and continue to innovate.”
Lynch, 58, was previously extradited to the United States and placed under house arrest and 24-hour surveillance before the trial. He long maintained that HP used him as a scapegoat, alleging that he bungled its acquisition of Autonomy and then mismanaged the company’s software assets.
Lynch made £500m from the sale of Autonomy to HP. But just a year later, HP wrote down its investment by $8.8 billion, saying that $5 billion of that writedown was due to practices employed by Autonomy’s previous management team that inflated Autonomy’s value and misled potential buyers into believing that the company was much more valuable.
Prosecutors accused Lynch and Stephen Chamberlain, Autonomy’s former vice president of finance, of illegally inflating revenue before the acquisition and hiding high-margin software revenue within unprofitable hardware sales.
At trial, Lynch successfully argued that he had not been involved in accounting and contract matters, but had instead focused on technical and marketing issues.
Although he argued unsuccessfully that the case should be heard in the United Kingdom, leading to his extradition, the American jury exonerated Lynch of all charges, along with Chamberlain, who was also on trial.
The US attorney’s office in San Francisco said: “We recognize and respect the verdict. “We would like to thank the jury for their attention to the evidence the government presented in this case.”
The sale of Autonomy to HP was seen as a vindication of the UK’s burgeoning tech scene, and the platform’s ability to sift through unstructured databases was, at the time, seen as a way for HP to rebuild its stagnating business. hardware.
Lynch co-founded Autonomy in 1996 from a specialist software research group called Cambridge Neurodynamics.
Lynch, who received an OBE for services to business in 2006, became an adviser to the UK government and sat on the boards of the BBC and the British Library, founded Invoke Capital VC and invested in the innovative Darktrace cybersecurity.