Mike Lynch, the co-founder and former CEO of Autonomy, has been acquitted of all 15 felony counts of fraud and conspiracy related to the 2011 acquisition of Autonomy by Hewlett Packard (HP). The verdict, reached by a federal court jury in San Francisco, marks the end of an 11-week criminal trial that delved into the history of the deal.
HP had initially hailed the acquisition as a major coup, with then-CEO Meg Whitman calling it a “game-changer” for the company. However, the deal ultimately proved to be a costly albatross for HP, which wrote down the value of Autonomy by $8.8 billion just eight months after the acquisition.
Lynch was accused of orchestrating a fraud and conspiracy to manipulate Autonomy’s financial statements and deceive HP into overpaying for the company. The US Justice Department alleged that Lynch and others had created fake revenue streams and inflated the value of Autonomy’s products and services.
However, the jury ultimately found Lynch not guilty of all charges, rejecting the government’s claims of fraud and conspiracy. The verdict was a significant blow to the US government, which had spent years investigating and prosecuting Lynch.
The trial was marked by intense legal wrangling, with both sides presenting competing theories of the events surrounding the acquisition. In the end, Judge Charles Breyer threw out one of the counts of securities fraud, a move that some observers saw as a sign that the prosecution’s case was weakening.
Mike Lynch (Via Mike Lynch/Twitter)
Lynch, who was extradited from the UK and spent years fighting extradition and legal proceedings, was visibly emotional as the verdict was read. Speaking outside the courtroom, he praised the jury for their careful consideration of the evidence and thanked his legal team for their work.
The verdict is likely to have significant implications for the technology industry, both in terms of the conduct of corporate leaders and the scrutiny they face from regulators. It also raises questions about the role of financial auditors and the due diligence process in corporate deals.
The acquittal of Lynch is a major vindication for him and his legal team, who had maintained from the start that he had done nothing wrong. It also underscores the difficulties of proving fraud and conspiracy in complex corporate deals.
As the dust settles on the verdict, questions will inevitably arise about the future of Autonomy and HP. Will HP continue to pursue claims against Autonomy’s former leaders, or will the company seek to put this chapter of its history behind it? What lessons will be learned from the deal, and how will they be applied to future acquisitions and mergers?
In the end, the verdict in the Mike Lynch trial will be seen as a significant moment in the troubled history of the Autonomy deal. While it is not the end of the story, it marks the beginning of a new chapter, one that will require careful consideration and reflection from all parties involved.
