Former Autonomy CEO Mike Lynch issued a statement Thursday after being acquitted of criminal charges, ending a 13-year legal battle with Hewlett-Packard that became one of Silicon Valley’s biggest fraud cases. He was accused of falsely inflating the British startup’s profits ahead of Autonomy’s $11 billion sale to HP in 2011.
In response to the not guilty verdict, Lynch (pictured above, left, when he appeared on TechCrunch Disrupt) said in a statement: “We are pleased with today’s verdict and thank the jury for their attention to the facts over the past 10 weeks. I would like to express my deepest gratitude to the legal team for their tireless efforts on my behalf. I’m looking forward to returning to the UK and getting back to what I love most: my family and innovation in my field.”
After a 12-week trial, the entrepreneur was found guilty of 15 counts of fraud and conspiracy brought in connection with the 2011 acquisition.
Lynch’s victory is notable considering that only 0.4% of federal criminal cases in the United States in fiscal year 2022 resulted in a trial and acquittal, and only 12% of all wire fraud prosecutions, according to the Pew Research Center. . As a result, he was found not guilty.
“We are very pleased with the jury’s decision, which strongly rejects the government’s excessive response to this incident,” Lynch’s legal counsel, Christopher Morvillo and Brian Heberlig, said in a statement. revealed. The evidence presented at trial concluded that Mike Lynch was innocent. This ruling closes the book on 13 years of tireless efforts to hold Dr. Lynch accountable for HP’s well-documented incompetence. Fortunately, the truth finally won. “We are grateful to Dr Lynch for his trust during this ordeal and hope he can now return to the UK to resume his life and continue his innovation.”
Lynch, 58, was previously extradited to the United States and placed under house arrest and 24-hour surveillance ahead of trial. He has long claimed that HP interfered with its acquisition of Autonomy and later mismanaged the company’s software assets, making him a scapegoat for HP.
Lynch made £500 million selling Autonomy to HP. But just one year later, HP’s investment totaled $8.8 billion. It said $5 billion of that was due to practices employed by Autonomy’s early executives that inflated Autonomy’s value and misled potential buyers into believing the company was worth much more.
Prosecutors accused Lynch and Autonomy’s former vice president of finance, Stephen Chamberlain, of illegally inflating profits ahead of the acquisition and hiding high-margin software revenue behind unprofitable hardware sales.
At trial, Lynch successfully argued that he had not been involved in accounting and contractual matters and had instead focused on technical and marketing issues.
Despite a failed argument that the case should be tried in England, which led to his extradition, an American jury found Lynch not guilty on all counts, along with Chamberlain, who was also on trial.
“We acknowledge and respect the ruling,” the U.S. attorney’s office in San Francisco said. “I am grateful to the jury for their attention to the evidence presented by the government in this case.”
Autonomy’s sale to HP was seen as a testament to Britain’s burgeoning tech sector, and at the time, the platform’s ability to sift through unstructured databases was seen as a way for HP to rebuild its mediocre hardware business.
Lynch co-founded Autonomy in 1996 from a specialized software research group called Cambridge Neurodynamics.
After being awarded an OBE for Corporate Services in 2006, Lynch became an advisor to the UK government, sat on the boards of the BBC and the British Library, and founded Invoke Capital VC, which invested in the groundbreaking cybersecurity company Darktrace.
