British tech entrepreneur Mike Lynch acquitted in fraud trial over Hewlett-Packard deal

Autonomy founder Mike Lynch was acquitted of fraud by a jury in San Francisco, a major win for the software entrepreneur who has been dogged by legal problems since the sale of his company to Hewlett-Packard for $11 billion in 2011.

Lynch was acquitted on all charges - one count of conspiracy and 14 counts of wire fraud. Former Autonomy finance executive Stephen Chamberlain, who faced the same charges, was also acquitted.

The trial involved allegations that Lynch and Chamberlain schemed to inflate Autonomy’s revenue. The sale was one of the biggest British tech deals at the time but quickly turned sour, with HP writing down Autonomy’s value by $8.8 billion within a year.

Lynch expressed elation with the verdict and stated his intention to return to the UK and focus on his family and innovations. The Office of the United States Attorney acknowledged and respected the verdict.

During the trial, jurors heard from over 30 witnesses, including the former HP CEO who was fired after the Autonomy deal was announced. Lynch denied wrongdoing and attributed the integration issues to HP. Prosecutors alleged that Autonomy’s finances were padded through back-dated agreements and fake contracts.

Lynch’s legal team argued that HP rushed through due diligence before the sale. He entrusted money matters to Autonomy’s former chief financial officer, who was separately convicted in 2018. Lynch, a Cambridge University-educated entrepreneur, transformed his research into Autonomy, Britain’s largest software company.

The acquisition intended to boost HP’s software business but led to bitter legal battles. HP won a civil lawsuit against Lynch and the former CFO in London, with damages yet to be decided. The company is seeking $4 billion.