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Jury Clears Lynch of Fraud Charges in HP Autonomy Lawsuit

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You may recall back in 2011 when Hewlett-Packard – before it split into two companies – purchased British software company Autonomy. That acquisition ended badly however. Within a year of the acquisition, HP wrote off $8.8 billion of Autonomy’s value, alleging “serious accounting improprieties” and “outright misrepresentations,” as well as poor running of the company by the previous management, which included former Autonomy CEO Mike Lynch. HP later sold Autonomy.

In 2018, the U.S. Attorney’s Office, Norther District of California, sued Lynch, who faced 15 counts of fraud, accusing him of inflating Autonomy’s revenue and sales, misleading regulators, and duping HP. The government alleged that Lynch paid customers to buy Autonomy software in order to boost the company’s reported revenue.

A jury however has acquitted Lynch of all charges, which included one count of conspiracy and 14 counts of wire fraud.

The trial began in March, with witnesses such as Leo Apotheker, a former Hewlett-Packard CEO who was fired a few weeks after the Autonomy acquisition.

Lynch’s legal team argued that HP didn’t do its due diligence before acquiring Autonomy, and that Lynch did not have knowledge of accounting regularities.

“I am elated with today’s verdict and grateful to the jury for their attention to the facts over the last 10 weeks,” Lynch said.

Update: While Lynch won this case, he faces another lawsuit. Hewlett-Packard Enterprise previously filed a civil lawsuit for $4 billion alleging fraud regarding the Autonomy purchase. That lawsuit has yet to be decided.

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