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UK Tech Tycoon Mike Lynch Acquitted in Major Silicon Valley Fraud Trial
In a significant setback for US prosecutors, a jury has found UK tech magnate Mike Lynch not guilty of accusations linked to Silicon Valley's largest-ever fraud, involving Hewlett Packard's $11 billion acquisition of his software startup, Autonomy Corp, 13 years prior. This follow-up was highly anticipated after Lynch lost a civil trial in London in 2022 for allegedly inflating Autonomy's revenue through accounting tricks before its sale in 2011. Notably, Hewlett Packard is pursuing $4 billion in damages, although the UK judge hinted at a likely lower amount.
Redemption for Lynch
Thursday's verdict in San Francisco represents a pivotal redemption for Lynch, who for years maintained he was unfairly blamed for the ill-fated acquisition by one of America's oldest tech giants. Displaying palpable relief, Lynch embraced his lawyer and expressed his intention to return to the UK to focus on his family and professional aspirations. The trial spanned approximately three months and included testimonies from dozens of witnesses, including Lynch himself.
Allegations and Defense
Prosecutors contended that Autonomy manipulated its financial figures to appear more robust than it was, using methods such as back-dating contracts and simulating shipments. Additionally, they accused Lynch of retaining over $800 million from the sale, urging jurors to "follow the money" to uncover the fraud.
On the witness stand, Lynch refuted the allegations, claiming ignorance of certain dubious practices attributed to him and delegating essential decisions to subordinates. His defense argued that Hewlett Packard’s significant financial loss post-acquisition was largely its responsibility. The most serious charge against Lynch, securities fraud, was dismissed last week, which could have led to a 25-year sentence.
Jury's Perspective
The jury voiced skepticism about key testimonies from Autonomy's former US finance chief, who portrayed himself as a whistleblower. They also harbored doubts about the government’s evidence of Lynch’s involvement in questionable hardware sales. Notably, Sushovan Hussain, Autonomy’s former CFO, had previously been sentenced to five years in prison for accounting fraud.
Interestingly, Hewlett Packard has since split into two entities: Hewlett Packard Enterprise Co., managing corporate computing and software, and HP Inc., overseeing printers and PCs. Hewlett Packard Enterprise Co., not a party to this criminal case, opted not to comment on the jury's verdict.
