Abhirup Roy, Jodi Godoy
(Reuters) – Autonomy founder Mike Lynch was acquitted of fraud on Thursday by a San Francisco jury, a major victory for the entrepreneur dogged by legal troubles following the disastrous $11 sale of his company to Hewlett-Packard (HP (NYSE: )). billion in 2011.
Representatives for Lynch and U.S. prosecutors said Lynch was acquitted of all 15 charges – one count of conspiracy and 14 counts of wire fraud, each related to specific transactions or communications.
Former Autonomy CFO Stephen Chamberlain, who faces the same charges along with Lynch at trial, was also acquitted of all charges, Lynch’s spokesman said.
The trial, in which prosecutors said Lynch and Chamberlain planned to boost Autonomy’s earnings, was the latest chapter in the legal saga that emerged from the failed deal.
The sale of Autonomy was one of the largest British technology deals of the time, but quickly fell through, with HP cutting Autonomy’s value by $8.8 billion within a year.
“I’m thrilled with today’s verdict,” said Lynch, who was once compared to Apple (NASDAQ:) co-founder Steve Jobs and Microsoft (NASDAQ:) co-founder Bill Gates. “I’m looking forward to returning to the UK and getting back to what I love most: my family and innovating in my field.”
Abraham Simmons, a spokesman for the US Attorney’s Office, said: “We acknowledge and respect the verdict.”
At the trial, which lasted three months, jurors heard from more than 30 government witnesses, including Leo Apotheker, the former HP CEO who was fired weeks after the Autonomy deal was announced.
Lynch also took the stand in his own defense at trial, denying wrongdoing and telling jurors that HP had failed to integrate the two companies. Prosecutors said Lynch and Chamberlain padded Autonomy’s finances in several ways, including backdated agreements and back-and-forth deals in which funds were transferred to customers through fictitious contracts. Lynch’s lawyers argued at trial that HP was so eager to acquire Autonomy ahead of potential competitors that it rushed to conduct due diligence before the sale. At the stand, the Cambridge University-educated entrepreneur said he was focused on technical issues and entrusted financial matters and accounting decisions to Sushovan Hussain, Autonomy’s then chief financial officer. Hussain was separately convicted in 2018 at a trial in the same court on charges related to the HP deal. He was released from US prison in January after serving a five-year sentence.
Lynch turned pioneering research at Cambridge into the foundation of Autonomy, which became Britain’s largest blue-chip software company.
He was praised by academics and scientists and asked to advise the British government on technology and innovation. The Autonomy acquisition was intended to boost HP’s software development. Instead, it spawned a series of bitter and costly legal battles. HP largely won a civil case against Lynch and Hussain in London in 2022, although a decision on damages has yet to be made. The company is seeking $4 billion.