back to article Former Autonomy CFO indicted in USA for misleading investors

The long-running spat between HP and the company formerly known as Autonomy has taken another turn, with Autonomy's former chief financial officer Sushovan Hussain indicted in a San Francisco court last week. The move was immediately criticised by a collective of former Autonomy executives as the Department of Justice (DoJ) “ …

  1. Youngone

    Lawyers

    I have no idea whether the Autonomy people lied about the value of the company or not, but it seems really odd to me that HP wrote off $8.8 billion in value a year after buying in but somehow it's not their fault.

    John Keker makes a very good point about UK citizens and businesses verses US law as well. Not that that will save his client, HP are huge bribers campaign contributors.

    1. a_yank_lurker Silver badge

      Re: Lawyers

      @Youngone - Something smells fishy about this whole affair. I suspect part of the problem was the PHBs running HP panicked and bought Autonomy without proper due diligence. But it is possible that there were enough signs that should have alerted someone who paying attention that Autonomy had its problems. Whether there was fraud involved, maybe, but definitely incompetence.

    2. streaky

      Re: Lawyers

      Best case scenario is that HP utterly utterly failed in it's due diligence. Autonomy pre-acquisition was well audited (far as I can tell) and was audited again by a third party pre-acquisition, and also as far as I can tell did nothing wrong in UK law.

      HP wildly mis-valued Autonomy (you can tell this by looking at their pre-acquisition market cap), misunderstood their product and completely mishandled bringing Autonomy into the fold; mostly by - from what I've seen - bringing Autonomy into the fold. HP made their own conclusions and only have themselves to blame. If anybody should be indicted it should be the acquisition auditors and it's former CEO. Though I don't think the auditors did something wrong either. HP's board was sold a bill of good by their former CEO and they'll do absolutely anything to shift the blame. Real proof for me is a sizeable class of HP shareholders think that it was all HP's fault.

      Really makes a change to see the US criminal justice system abusing wire fraud laws though, oh wait no that's what they do every time they can't find guilt but fancy locking somebody up for doing ostensibly nothing wrong.

      If he happens to get extradited there's something wrong with the extradition treaties - people can only work to the law as they know it.

      1. Anonymous Coward
        Anonymous Coward

        Re: Lawyers

        oh wait no that's what they do every time they can't find guilt but fancy locking somebody foreign up for doing ostensibly nothing wrong

        Fixed it for you. That will only get worse under Trump as blaming foreigners has really helped him along.

      2. James 51

        Re: Lawyers

        Here is the first thing that came to mind (story about three bankers handed over when the treaty first came into force):

        http://news.bbc.co.uk/1/hi/business/5174902.stm

        However, although the alleged perpetrators and victims are based in the UK, the Crown Prosecution Service has not brought any charges against the three.

        We have requested British authorities to bring a case against us if there is one to answer.

        The men have called on the UK's Financial Services Authority (FSA) to bring charges against them, but say the FSA has not done so.

        They have also written to NatWest asking them to bring civil proceedings against them "if you consider we have committed an offence", but say there has been no action and the bank is still providing financial services to them.

        Instead, the US Department of Justice has brought seven indictments of "wire fraud" relating to the deal, covering emails and faxes sent between Houston, London and the Cayman Islands four years ago.

        1. Mark 110

          Re: Lawyers

          Whilst I have issues with the rather one sided eextradition treaty these guys were well dodgy:

          https://en.wikipedia.org/wiki/NatWest_Three

        2. streaky

          Re: Lawyers

          NW3 was the govt farming out prosecutions to the US.

          This would be making shit up to blame anybody but HP's board for something that isn't even a crime in the US (doing one's job to globally expected standards).

          Ever sent an email in your life about anything related to work or personal life or visited online banking or ordered something online. By US standards this could be a wire fraud charge even in the absence of actual fraud.

      3. Adrian Tawse

        Re: Lawyers

        Unfortunately we have a most unsatisfactory extradition treaty with the US. Under this treaty the US need only make an allegation of a crime to trigger an extradition. The UK has to prove a crime to trigger an extradition. This extradition treaty was negotiated and signed by the respective heads of state, In the UK treaties are ratified by the PM by Royal Prerogative - which it was, In the US treaties have to be ratified by the senate - which refused. Yet another case of the UK being shafted by the US.

    3. Steve Davies 3 Silver badge

      Re: Lawyers

      US Laws apply everywhere on the planet. Get used to it people.

      The USA and American companies can do no wrong (in their eyes). Everyone else is evil.

      Better make sure that you don't send any 6B lead pencils to Iran without getting US Gov approval. Graphite might just possibly be used in a weapon you know.

      And it will get worse under Drump.

  2. Steve Knox
    Trollface

    Extradition Won't Happen

    It'll take more than two months. With a Name Like Hussain, there's no way our President after that will let him into this country.

    1. You aint sin me, roit Silver badge

      Re: Extradition Won't Happen

      I think you'll find that's what Guantanamo Bay is for...

  3. Colin Tree

    slight of hand

    After some slight of hand they got their 8.8M back, so what's the problem

    1. iRadiate

      Re: slight of hand

      One problem might be that that is several orders of magnitude less than what they paid. :)

    2. Anonymous Coward
      Anonymous Coward

      Re: slight of hand

      After some slight of hand they got their 8.8M back, so what's the problem

      A lack of people to take the blame for an utter lack of acquisition due diligence.

  4. Andy The Hat Silver badge

    Extradition?

    Will there be a possibility of extradition? The UK are not allowed to extradite to countries where there is the risk of the use of torture. Trump has loudly proclaimed his support for US using torture ...

    1. James 51

      Re: Extradition?

      Only for as long as we're members of the ECJ and ECHR.

  5. amanfromMars 1 Silver badge

    Idiots in charge of the asylum is a surefire recipe for disaster and mayhem with CHAOS ruling?

    Former Autonomy CFO indicted in USA for misleading investors .... Richard Chirgwin/El Reg

    Crikey, Richard,

    How very odd and perverse and corrupt is it, that misleading nations and wasting/misspending billions, is tolerated by populations and allowed for politicians, with their imagining to have an immunity and impunity. What ignorant and arrogant fools they be, for such nonsense breeds rabid contempt and inevitably violent countering revolution/silent sedition/targeted mad action and smarter proaction.

    And media being complicit with its supporting reporting/non-reporting is a shame and a blame which they can avoid and deny is warranted.

    1. James 51

      Re: Idiots in charge of the asylum is a surefire recipe for disaster and mayhem with CHAOS ruling?

      Okay, who are you and what have you done with amanfromMars1? Because that that completely sensible and coherent without any random caps at all.

  6. Anonymous Coward
    Anonymous Coward

    See also

    Who were the auditors in this picture? Was it these people:

    http://www.telegraph.co.uk/business/2016/11/10/deloitte-hit-with-record-4m-accounting-fine-over-aero-inventory/

    Oh apparently it was:

    http://www.telegraph.co.uk/finance/financial-crime/11509993/HP-in-talks-with-Deloitte-over-Autonomy-auditing-claims.html

    And in 2012 there was this interesting article from an outside observer with inside information about Autonomy's business and accounting practices, such as getting slightly confused between hardware sales and software sales:

    http://uneasyempires.blogspot.co.uk/2012/11/autonomy-on-trial-what-i-saw-in.html

    Enjoy.

    1. John Smith 19 Gold badge
      Unhappy

      "http://uneasyempires.blogspot.co.uk/2012/11/autonomy-on-trial-what-i-saw-in.html"

      Nice.

      It looks like Autonomy's "defense" is "If you were too stupid to realize we were crooks that's your tough luck."

      Sorry but IRL if you're a crook that's actually the crime, not your victims stupidity.

      Although HP were very stupid.

  7. Anonymous Coward
    Anonymous Coward

    I worked for HP...

    ...when this deal went through. As usual HP management were stupid because they did not carry out comprehensive due diligence but were impressed by the Autonomy management's stories about their finances and and the wining and dining that went on. As for the "product", I don't think that HP management understood what it was or what it did and for those reasons they thought it must be wonderful (does anybody understand what Autonomy really delivered - even now?). This fiasco was not helped (as far as HP was concerned) because they were dealing with crowd of wide-boys (Brits will understand what a wide-boy is) who quite easily misled and duped HP and sold them a pup and walked away with a shed-load of money.

    Basically - idiots misled by crooks.

  8. xeroks

    The thing that's wrong about this

    as we all know:

    When this bloke is extradited, he will plea bargain, and will spend some years in prison. This will happen without regard to whether he actually did anything illegal in any country.

    It also seems to be without regard to whether the prosecutor has evidence to backup their assertion.

    Is that fair, or just?

  9. Josh Cain

    Please...

    Two words:

    Leo Apotheker

    Autonomy, and lets not forget Palm. Both were acquired, then dropped trou on.

  10. Anonymous Coward
    Anonymous Coward

    HP were idiots from Day Zero

    Whenever this thread comes up, we should always remind ourselves that on top of everything else, HP paid twice as much as any other company was willing to bid.

    So even if Autonomy had been worth every penny that the rest of the industry thought it was worth, HP was already incompetent to the tune of several billion dollars.

  11. Anonymous Coward
    Anonymous Coward

    I did pretty well in an interview for a pre-sales role, then found out on the second interview that the product was Autonomy. Having had a past customer move from a proven platform to Autonomy which still wasn't working after a good few years I decided I was happy in my current role.

    I wonder if it'll ever work well, doesn't appear to have yet (not to say it doesn't function at all..). HP don't seem to have improved anything.

  12. John Smith 19 Gold badge
    Unhappy

    Still not really clear what Autonomy did or why HP wanted it.

    And it looks like HP weren't either.

    But then I didn't pay $8Bn for the privilege of finding out.

  13. Pliny the Whiner

    "The UK's Serious Fraud Office ..."

    I find it somehow comforting that the United Kingdom must have a Lighthearted Fraud Office. That's as it should be. I'm guessing that low-level offenders are given a sound smacking with a rolled up copy of The London Times.

    This story is an illustration of why Yahoo suddenly remembered the massive data breach they had a couple of years earlier. The guys in the Armani suits don't like to go to prison, so they suddenly remember all sorts of alarming things that they forgot to tell the rest of us.

    1. allthecoolshortnamesweretaken

      I strongly suspect there isn't a 'Lighthearted Fraud Office'.

      However, about the 'Silly Fraud Office' ...

      1. eldakka Silver badge

        Overseen by the Ministry of Silly Walks I assume?

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