British tech tycoon Lynch beats HP fraud case in stunning US loss

(Bloomberg) — In a huge loss for U.S. prosecutors, a jury found British tech mogul Mike Lynch not guilty of criminal charges for committing Silicon Valley’s biggest-ever fraud 13 years ago in tricking Hewlett Packard Co. into buying his software startup. for 11 billion dollars.

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Lynch’s victory in San Francisco federal court came after he lost a civil trial in London in 2022 over allegations that he and Autonomy Corp.’s former chief financial officer. allegedly used accounting tricks to inflate the company’s revenue before its sale in 2011. Hewlett Packard is seeking $4 billion in damages, although the British judge said he would likely award “significantly less.”

Thursday’s result represents remarkable redemption for Lynch, who has claimed for years that he was the scapegoat for the ill-fated acquisition of Autonomy by one of America’s oldest technology companies.

Lynch hugged his lawyer and wiped his eyes after the verdict was read as some people in the courtroom audibly cried. U.S. District Judge Charles Breyer said he would issue an order that Lynch was free to leave the San Francisco residence where he was under 24-hour surveillance by security guards hired after his extradition from the United Kingdom Last year.

” I like the most “

“I can’t wait to return to the UK and reunite with what I love most: my family and innovating in my field,” Lynch said in a statement.

The verdict, after two days of deliberations, comes after a roughly three-month trial in which dozens of witnesses, including Lynch himself, testified about the deal. He was charged with conspiring with Stephen Keith Chamberlain, Autonomy’s former vice president of finance, who was also on trial and was acquitted by the jury.

“We respect the verdict and thank the jury for its attention to the evidence presented by the government in this case,” said spokesman Abraham Simmons on behalf of the U.S. Attorney’s Office in San Francisco.

Prosecutors alleged that Autonomy used a number of manipulations to make its revenue growth appear better than it was, including backdating contracts, pretending to ship goods and overpaying for unnecessary services so that suppliers then buy the company’s products.

Lynch, who served as an adviser to two British prime ministers, was accused in a 2018 indictment of pocketing more than $800 million when Hewlett Packard bought Autonomy, then Britain’s second-largest technology company .

Delegated decisions

On the stand, Lynch claimed he was unaware of some of the wrongdoing attributed to him, saying he delegated key decisions to subordinates and denied other allegations. He argued that Hewlett Packard’s $8.8 billion writedown the year after the acquisition was actually the Silicon Valley giant’s fault.

Breyer last week dismissed the most serious charge against Lynch, securities fraud, which carries a maximum prison sentence of 25 years. He could have faced up to 20 years in prison for wire fraud if convicted…

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