Mike Lynch: Autonomy founder’s fraud trial begins in the US

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By journalsofus.com


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Mike Lynch arrives at federal court in San Francisco on Monday

British tech entrepreneur Mike Lynch is appearing in court in the US as he faces trial on fraud charges.

Mr Lynch, once known as “Britain’s Bill Gates”, is accused of overestimating the value of his software company when it sold it to Hewlett-Packard (HP) in 2011.

The 58-year-old man, who faces 16 charges, faces up to 25 years in prison if convicted. He denies the claims.

He was extradited to the US last year after a UK judge ruled in favor of HP in a similar civil fraud case.

In opening arguments, Mr Lynch’s lawyer Reed Weingarten said the tycoon was preparing to present his case at trial as he sought to defend the record sale of the firm Autonomy for more than $11bn (£8.6bn). Has been seriously deteriorated since sale. ,

At the time, the deal was considered the largest-ever acquisition of a British technology business.

But just a year later, HP reduced Autonomy’s value by $8.8 billion, claiming it had been defrauded by overpaying for the company.

Mr. Weingarten told the jury that Mr. Lynch left finance to others and focused on technology.

“Mike spent many sleepless nights worrying about autonomy, but not about accounting,” Mr. Weingarten said, according to the Reuters news agency.

Mr. Lynch co-founded Autonomy in 1996.

It became one of the UK’s top 100 public companies, known for software that can extract useful information from “unstructured” sources such as phone calls, emails or videos.

US prosecutors in San Francisco say Mr Lynch entered into back-dated agreements to mislead about the sale of the company; hid the firm’s loss-making hardware resale business; and intimidated or paid off people who raised concerns, among other claims.

In court filings, his lawyers have argued that “the real cause of the write-down” was HP’s failure to manage the merger.

He wrote, “Then, with the stock price falling under the weight of its own mismanagement, it circled the wagons to protect its new leaders and made absurd accusations of fraud on Mr. Lynch.”

Mr Lynch, a former adviser to the UK government who sat on the boards of the BBC and the British Library, vigorously fought efforts by US prosecutors to prosecute the case in the US, which is known for its punitive approach to white-collar crime.

In 2019, Autonomy’s former chief financial officer Sushovan Hussain was jailed for five years and fined millions of dollars on 16 counts of fraud, securities fraud and other charges.

In 2022, HP won a civil fraud case against Mr Lynch and Hussain in the High Court in London. It is now reportedly seeking $4 billion.

In that case, Mr. Lynch and Hussain argued that HP’s claims “were designed to conceal and justify changes in corporate thinking, and to scapegoat them, which in reality conflated buyer’s remorse with management failures.” Is for”.

Along with Mr Lynch, Autonomy’s former finance executive Stephen Chamberlain is also being sued.

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