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 revenue at the UK startup before the $11 billion sale of Autonomy to HP in 2011.
Commenting on the acquittal, Lynch (pictured above, left, appearing at TechCrunch Disrupt) said in a statement: “I am thrilled with today’s verdict and grateful to the jury for their attention to events over the past ten weeks. Many thanks to my legal team for their tireless work on my behalf. I look 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 businessman was acquitted of 15 counts of fraud and conspiracy brought against him in connection with the 2011 acquisition.
The victory for Lynch is notable in light of the fact that in the US in fiscal year 2022, only 0.4% of federal criminal cases resulted in a trial and acquittal, according to the Pew Research Center, and only 12% of all of fraud prosecutions resulted in acquittals.
Christopher Morvillo and Brian Heberlig, legal counsel for Lynch, added in a statement: “We are delighted with the jury’s verdict, which reflects a resounding rejection of the government’s profound overreach in this case. The evidence presented at trial conclusively proved that Mike Lynch is innocent. This verdict closes the book on a relentless 13-year effort to pin HP’s well-documented incompetence on Dr. Lynch. Fortunately, the truth finally prevailed. We thank Dr. Leeds for his trust throughout this ordeal and we hope that he will now be able to return to England to restart his life and continue to innovate.”
Lynch, 58, had previously been extradited to the US and was placed under house arrest and 24-hour surveillance before the trial. He has long argued that he was scapegoated by HP, claiming it failed to acquire Autonomy and later mismanaged the company’s software assets.
Lynch made £500m from the sale of Autonomy to HP. But just a year later, HP cut its investment by $8.8 billion, saying $5 billion of that reduction was due to practices used by Autonomy’s previous management team that inflated Autonomy’s value and misled potential investors. buyers to believe that the company was much more valuable.
Prosecutors accused Lynch and Stephen Chamberlain, Autonomy’s former vice president of finance, of illegally inflating revenue before the acquisition and hiding high-margin software revenue in unprofitable hardware sales.
At trial, Lynch successfully argued that he had not been involved in accounting and contract matters, but had focused on technical and marketing issues.
Although he unsuccessfully argued that the case should be tried in the UK, leading to his extradition, a US court acquitted Lynch on all charges, along with Chamberlain, who was also on trial.
The US attorney’s office in San Francisco said: “We recognize and respect the verdict. We would like to thank the jury for their attention to the evidence presented by the government in this case.”
The sale of Autonomy to HP was seen as a vindication of the UK’s booming tech scene, and the platform’s ability to explore unstructured databases was seen, at the time, as a way for HP to rebuild its flat-panel hardware business.
Lynch co-founded Autonomy in 1996 from a specialized software research group called Cambridge Neurodynamics.
Awarded an OBE for services to business in 2006, Lynch became a UK government adviser who sat on the boards of the BBC and the British Library, founded Invoke Capital VC and invested in cyber security company Darktrace.
