Cambridge entrepreneur Mike Lynch has been cleared of all the fraud charges against him relating to the $11billion (£8.64 billion) sale of the company Autonomy to Hewlett Packard (HP).
The not guilty verdicts were delivered on Thursday (6 June) by a federal court jury in San Francisco followed an 11-week criminal trial that delved into the history of HP’s 2011 acquisition of the Cambridge software company that Dr Lynch founded in 1996 and oversaw as chief executive.
“I am elated with today’s verdict and grateful to the jury for their attention to the facts over the last 10 weeks,” Mr Lynch said after the verdicts. “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.”
Silicon Valley company at first celebrated the deal for Autonomy as a huge coup that would propel it down a promising new path, but then quickly came to regret the move, made under its then-chief executive Meg Whitman.
It wrote down the value of Autonomy by billions of dollars soon after the deal closed and claimed it had discovered huge accounting improprieties.
Prosecutors claimed Dr Lynch was the “driving force” of the fraud and called more than 30 people to the stand during the trial. They argued Autonomy, which marketed itself as a software company, often packaged hardware with it too in order to artificially boost sales.
They argued backdated agreements were used to mislead HP about the company's sales and that people who had raised concerns were intimidated or paid off.
But Dr Lynch’s lawyers claimed HP had failed to vet the deal properly.
Dr Lynch, who was the final witness to testify, said his background was technical and he had little knowledge of the day-to-day business and accounting practices, claiming irregularities in the accounts were down to other employees.
Autonomy’s chief financial officer, Sushovan Hussain, was sentenced to five years in prison when he was found guilty of fraud in 2018.
Dr Lynch faced 16 counts of wire fraud, securities fraud and conspiracy, but towards the end of the trial, US District Judge Charles Breyer threw out a count of securities fraud included in the US Justice Department case in an indictment dating back to 2018.
Had he been convicted, he could have faced 20 years in prison.
It had taken years to extradite Dr Lynch from the UK and there was more legal wrangling before the trial finally began in mid-March.
The 58-year-old, who had been free on $100m bail, was once described as the Bill Gates of Britain - a title he seemed to live up to when he negotiated the Autonomy sale that generated a windfall of more than $800m for him.
The acquittal vindicates the entrepreneur, who spent years fiercely denying he did anything wrong.
And it represents another setback for HP, which had spent years claiming Dr Lynch had duped the company into a deal that deepened its troubles.
