Former Autonomy CEO Dr. Mike Lynch made a statement on Thursday after being acquitted of criminal charges, concluding a 13-year legal conflict with Hewlett-Packard, one of Silicon Valley’s major fraud cases. He was accused of inflating revenues at the UK startup before its $11 billion sale to HP in 2011.
Commenting on the acquittal, Dr. Lynch (pictured on the left above during his appearance at Truth Voices Disrupt) expressed: “I am elated with today’s verdict and grateful to the jury for their attention to the facts over the last ten weeks. My deepest thanks go to my legal team for their tireless work on my behalf. I am looking forward to returning to the UK and getting back to what I love most: my family and innovating in my field.”
After a 12-week trial, the entrepreneur was cleared of 15 counts of fraud and conspiracy linked to the 2011 acquisition.
Lynch’s victory is significant, considering that in the US, only 0.4% of federal criminal cases (according to the Pew Research Center for fiscal year 2022) result in trial and acquittal, and just 12% of wire fraud prosecutions end in acquittal.
Christopher Morvillo and Brian Heberlig, legal counsel for Dr. Lynch, remarked: “We are thrilled with the jury’s verdict, which reflects a resounding rejection of the government’s profound overreach in this case. The evidence presented at trial demonstrated conclusively that Mike Lynch is innocent. This verdict closes the book on a relentless 13-year effort to pin HP’s well-documented ineptitude on Dr. Lynch. Thankfully, the truth has finally prevailed. We thank Dr. Lynch for his trust throughout this ordeal and hope that he can now return home to England to resume his life and continue innovating.”
Lynch, 58, was previously extradited to the US and placed under house arrest with 24-hour surveillance ahead of the trial. He consistently claimed that HP scapegoated him, alleging that the company mishandled the Autonomy acquisition and mismanaged its software assets.
Lynch profited £500M from Autonomy’s sale to HP. However, a year later, HP wrote down its investment by $8.8B and attributed $5B of the price to Autonomy’s alleged revenue inflation.
Prosecutors accused Lynch and Chamberlain of unlawfully inflating revenues prior to the acquisition and concealing high-margin software revenues within unprofitable hardware sales.
During the trial, Lynch successfully argued that he was not involved in accounting and contract matters, instead focusing on technical and marketing issues.
Despite an unsuccessful attempt to have his case heard in the UK, leading to his extradition, the US jury cleared Lynch on all counts, along with Stephen Chamberlain, Autonomy’s former vice-president of finance.
The US attorney’s office in San Francisco stated: “We acknowledge and respect the verdict. We would like to thank the jury for its attentiveness to the evidence the government presented in this case.”
Autonomy’s sale to HP was seen as a validation of the UK’s thriving tech scene, with the platform’s ability to process unstructured databases viewed as a potential way for HP to revitalize its stagnant hardware business.
Lynch co-founded Autonomy in 1996 from a specialist software research group known as Cambridge Neurodynamics.
Awarded an OBE for services to enterprise in 2006, Lynch became a UK government adviser, participated on the boards of the BBC and the British Library, founded Invoke Capital VC, and invested in the successful cybersecurity company Darktrace.
