back to article Brit tech tycoon Mike Lynch cleared of all charges in US Autonomy fraud trial

Mike Lynch, founder and CEO of Autonomy, has been acquitted of criminal fraud and conspiracy charges arising from the 2011 sale of the British software company to Hewlett-Packard. On Thursday, a federal court jury in San Francisco cleared Lynch of all 15 charges – 14 counts of wire fraud and one count of conspiracy. Co- …

        1. John Brown (no body) Silver badge

          Re: Hilarious

          I guess that depends on how someone in the C-suite values their principles over their pay packet. The C-suite usually have large portions of their pay packet tangled up in shares, options, bonuses and other tax-twisting schemes that might make it costly to just quit on a point of principle rather than wait it out, hoping it blows over.

    1. Missing Semicolon Silver badge

      Re: Hilarious

      Previous experience made this a wise move.

    2. Vulture@C64

      Re: Hilarious

      He had the money to employ sufficient lawyers to get the job done properly, most of us wouldn't have anywhere near enough cash to do that so we'd sink without sight in the US system faced with similar charges.

      1. Fruit and Nutcase Silver badge
        Joke

        Re: Hilarious

        May be Trump will ditch his legal team for Lynch's

        1. Anonymous Coward
          Anonymous Coward

          Re: Hilarious

          The biggest problem with Trump's legal team is almost always going to be that they have Trump for a client.

          That might sound like a joke, but it isn't really.

          1. Michael Wojcik Silver badge

            Re: Hilarious

            This is true, but Trump also has a weakness for rubbish lawyers who stroke his ego, and a tendency to fire or lose the competent ones. His legal teams have been weighted toward terrible lawyers. (Legal Eagle did a good breakdown a while back.)

        2. Dave@Home

          Re: Hilarious

          They clear said "He had the money to employ sufficient lawyers to get the job done properly..."

          now, all evidence at the moment....

      2. ShortLegs

        Re: Hilarious

        "He had the money to employ sufficient lawyers to get the job done properly, most of us wouldn't have anywhere near enough cash to do that so we'd sink without sight in the US system faced with similar charges."

        Moot, as none of us here would be in the position to sell a company for £11billion anyway.

      3. Peter 6

        Re: Hilarious

        To be fair though, the average man in the street doesn't mastermind sales of companies to big multinationals to the tune of billions so that point doesn't really make sense.

    3. Jamie Jones Silver badge

      Re: Hilarious

      When the unlikely happens, it doesn't negate the unlikelyness.

    4. John Brown (no body) Silver badge

      Re: Hilarious

      "I don't know whether Lynch is guilty, but I recall all the histrionic wailing about Lynch being extradited and the doom fortold about how he would never see justice in America and instead spend the rest of his life unjustly imprisoned in a grim federal Supermax trading blowjobs for cigarettes. How are we feeling now, fellas?"

      Surprised :-)

      Remember, the opinions you described were based an past experience of cases in the US justice system. And those opinions were sometimes from US residents, so it's not just uninformed outsiders looking in who see a (sometimes) bias in that system.

  1. ANymoos

    Amazed it got this far given a jury reached a not guilty verdict so quickly.

    Almost like US prosecutors were acting as an arm of a big US tech company.

    1. Tam Lin

      The US prosecutors missed out on a really cushy job

      HP pays their lawyers a lot better than the Feds do - although why HP even employ lawyers is weird, inasmuch as they never listen to them.

  2. AlanSh
    Pint

    Good decision

    It was always 'buyer beware' in situations like these. HP should never have begun this travesty.

    Time for --------->

    1. John Brown (no body) Silver badge

      Re: Good decision

      Popcorn futures just dropped of a cliff.

  3. Jason Hindle

    It had the whiff of corporate arse covering from the start

    And I'm guessing a case like this has a high bar for conviction.

    For those saying we should have had more faith in the US justice system… The way prosecutors behave there makes the system incompatible* with ours. I will always treat extradition requests with scepticism.

    * Strong arming confessions of guilt through a system of plea bargaining? FFS!

    1. Anonymous Coward
      Anonymous Coward

      Re: It had the whiff of corporate arse covering from the start

      Even in investigation our systems differ wildly - in the US police officers can lie during an investigation as long as it does not “shock the conscience of the court or the community", whereas here there's a number of laws which basically mean we're not allowed to. For example you can't sit there saying "Look mate, we got it all on CCTV from everywhere" when you catch them wanking in a bush outside a church or whatever.

      I guess it comes down to the difference between interrogations and interviews!

    2. John Sager

      Re: It had the whiff of corporate arse covering from the start

      That does happen here. A case on TV recently had a couple of guys charged with attempted murder who pled guilty to GBH with intent. Avoided a life sentence.

    3. RegGuy1 Silver badge

      Re: It had the whiff of corporate arse covering from the start

      Isn't that what our wonderful Post Office Ltd did to its postmasters --say you stole it (although you claim you didn't) and we'll go easier on you. What's the difference?

      1. Anonymous Coward
        Anonymous Coward

        Re: It had the whiff of corporate arse covering from the start

        That was a "private" prosecution - for some probably historical reason the PO were able to prosecute people themselves.

  4. Anonymous Coward
    Anonymous Coward

    In a few years' time...

    ...this will be repeated by whatever AI company HP is about to waste a tonne of money on...

  5. Error403

    Definitely the right decision

    Attempting to paint Mike Lynch as "Dr Evil", which is what the prosecution tried to do, backfired completely. When I heard that he was going to take the stand himself (opening himself up to cross-examination, hence a risky tactic), I knew he'd have a chance of being found not guilty. Having met him myself on many occasions, the worst you can say about him, is that he's blunt. My impression of him is just what he says he is, a visionary technologist with a very good business instinct.

    1. amanfromMars 1 Silver badge
      Pint

      The Worthy Payback of Just Revenge, ... a Future Model Cloned for Autonomous Success

      My impression of him is just what he says he is, a visionary technologist with a very good business instinct. ..... Error403

      What he plans to focus his very good future business instinct interest on, should he again wish to strap himself into a leading visionary technology vehicle, will be more than just interesting news to more than just an interested and interesting few.

      Bravo, Mike. Have a well deserved beer on me. You certainly earned it .

    2. Michael Wojcik Silver badge

      Re: Definitely the right decision

      I have to say that I haven't seen much evidence for the "visionary technologist" bit.

  6. CorwinX Bronze badge

    Caveat Emptor...

    ... the principle that the buyer alone is responsible for checking the quality and suitability of goods before a purchase is made.

    Someone should have clued HP up on that.

    1. Pascal Monett Silver badge

      Re: Caveat Emptor...

      It's been a long time since HP had a clue.

  7. CorwinX Bronze badge

    Also...

    Surely HP should have sent their own auditors into Autonomy to delve into its financials before writing the cheque?

    Perhaps it's them they should be sueing.

    1. Boris the Cockroach Silver badge
      Happy

      Re: Also...

      They did

      And they paid up. cant remember the name of the auditers HP employed , but I guess when you're the CEO of HP and determined to pay whatever for a company, you're not going to listen anyone who nay says..... then you get fired.....

      1. Michael Wojcik Silver badge

        Re: Also...

        It was KPMG, and Apotheker fired them after they delivered the preliminary report, and admitted he didn't read even that in its entirety.

    2. Cruachan

      Re: Also...

      A settlement was agreed

      https://www.theregister.com/2021/03/29/deloitte_settled_hpe_lynch_lawsuit_45m/

      Deloitte were also fined for some of their failings at a tribunal, however most of the HP bigwigs were forced to admit on the stand that they had (at best) only glanced at the reports anyway.

      1. ecofeco Silver badge

        Re: Also...

        It was ALWAYS this.

        HP was hoisted by its own petard.

        Some of us said so from the beginning.

        1. Michael Strorm Silver badge
          Trollface

          HP no longer stands for Hewlett Packard, so...

          > HP was hoisted by its own petard.

          ...I think we just figured out what HP stands for now.

          1. John Sager

            Re: HP no longer stands for Hewlett Packard, so...

            On holiday in France years ago I bought a T shirt with a slightly modified HP logo. The wording underneath was Hors Service.

      2. I ain't Spartacus Gold badge

        Re: Also...

        Deloitte were Autonomy's auditors. And so got fined for irregularities in their job of doing that.

        HP themselves couldn't send auditors in - because this was a takeover under British rules - which are a lot less friendly. In US takeovers it's pretty common to got quite wide access to a company's books and data, in exchange for a large fee if the takeover falls apart. In the UK it's traditional to get a lot less information. You send people in to ask questions, you might not always get answers. If you don't like the lack on info, you can always walk away. You're supposed to be able to trust the figures you're given - because they're audited. But you're less likely to see the underlying books.

  8. alain williams Silver badge

    Does Mike Lynch get compensation ...

    for having wasted 13 years of his life being chased, and having his liberty infringed, by HP ?

    1. Gordon 10

      Re: Does Mike Lynch get compensation ...

      It aint over. Likely will never be until Lynch is dead or bankrupt.

      HPE are still after compo (£4bn?) in the UK for winning the UK civil case.

      1. John Brown (no body) Silver badge

        Re: Does Mike Lynch get compensation ...

        "HPE are still after compo (£4bn?) in the UK for winning the UK civil case."

        Were they actually awarded compo is that something still being talked about? If the award hasn't been finalised, I suspect this result will severely impact any award based on the civil case outcome. It might even be less than Lynches counter suit for defamation.

  9. Altrux

    Auto-know-better

    I worked for his horrible company for a while, in the Cambridge HQ. Honestly the worst place I've ever worked. The classic "burn you out like matchsticks" corporate culture. I've never felt happier than when I escaped. Lynch and his henchmen never bothered meeting junior employees. Far too conceited and up themselves. Watching this very, very long case has been incredibly cathartic, whatever the final outcome!

    1. Anonymous Coward
      Anonymous Coward

      Re: Auto-know-better

      Are there many companies of any sort of scale where the board bothers itself with junior staffers? Honest question. And also, being conceited isn't illegal or deserving of being dragged through the US Federal justice system.

      1. Altrux

        Re: Auto-know-better

        Richard Branson provides a good example here. Plenty of companies understand how to make a good culture, but too many still don't.

    2. Dave@Home

      Re: Auto-know-better

      Being a prick isn't a crime, thankfully

  10. Anonymous Coward
    Anonymous Coward

    Surprise of the Year !!!

    Don't know Mike Lynch or have any connection with HP/Autonomy *but* this IMO is the right result.

    HP did not perform 'Due Diligence' due to greed and desire to gain Autonomy before anyone else.

    Autonomy gained the best price it could get !!!

    HP had 'buyers remorse' and tried via every means possible to blame someone else.

    So surprised that a US of A court was able to find in favour of the *not* US of A company !!!

    HP need to give up the fight at this point before it costs yet more money ... but I expect an appeal which always seems to be possible *if* you have enough money .... See Trump for this in action !!!

    :)

    1. ecofeco Silver badge

      Re: Surprise of the Year !!!

      HP did not perform 'Due Diligence' due to greed and desire to gain Autonomy before anyone else.

      Autonomy gained the best price it could get !!!

      HP had 'buyers remorse' and tried via every means possible to blame someone else.

      Sums it up perfectly.

  11. Anonymous Coward
    Anonymous Coward

    Its a Fed Court so not a SF jury pool

    SF court / state court jury pools are a bit of a joke considering how dysfunctional most jury trials are. A few days trial dragged out for weeks so most people find a way out of serving.

    But the jury pool for the Northern District Federal Court would include the North Bay and a big chunk of the East Bay and the Peninsula. So a much higher probability of getting a high quality jury who look at the evidence, look at the prosecution case, and most importantly look at the relevant Federal law. If the jury deliberation came to a decision that fast that tells me the Federal prosecutors did a piss poor job of matching the charges and the evidence to the applicable laws. Very sloppy legal work.

    I know the SF Fed Attorney office has been a sad joke for the last few decade. By design. And Willie Brown made sure it was kept that way. But when Diane Feinstein went gaga her office lost the plot and the Fed Attorney for a while actually did start putting SF City hall corrupt officials (and others) in jail. But the new guy put in place last year looks like a "safe pair of hands" again. Which is probable why the SF Fed Attorneys office did such a crap job of presenting in court a good prosecution case. As this was a classic Ham Sandwich Case it should have been a slam dunk for a successful prosecution.

    Now the real question is - when are the real guilty parties for this epic clusterf*ck ($12+ billion) going to be hauled in front of a court of law. Ray Lane and Mark Andreessen. Who rammed through this deal despite huge internal HP opposition and who ignored and short circuited the internal due diligence at HP. Lynch is a con-man but Lane and Andreessen are little more than serial incompetent frauds. In their defense they are at least not Tim Draper level criminals. a.k.a Mr Theranos. And other scams.

    1. anothercynic Silver badge

      Re: Its a Fed Court so not a SF jury pool

      Surely you mean Apotheker, since he was the one who was in the driving seat when HP gobbled up Autonomy...

      1. Anonymous Coward
        Anonymous Coward

        Re: Its a Fed Court so not a SF jury pool..someone not paying attention

        So I guess you were not paying attention 15 years ago then

        Hurd gets ousted from HP due to a "little scandal". Cheers all round inside HP. The petty minded bean counter is gone.

        Lane gets the heave ho from Oracle in the most humiliating way after seeing himself as Larrys designated heir. Lane goes off and sulks as a VC.

        Apotheker is a typical big company blowhard who rises to the top at that thrusting go ahead company SAP. Yes,I am being sarcastic.

        Lynch shops Autonomy around because the revenue kiting operation though acquisition is heading for the inevitable implosion.

        Lane wants revenge and falls under Andressens typical BS spiel (the guy who single-handedly destroyed Netscape) so gets Apotheker made CEO and then pushes hard for the Autonomy deal.

        During his whole time at HP Apotheker was just a sock-puppet CEO. The guy was a total charlatan which everyone at HP in Palo Alto saw through. So all due diligence by Legal etc total ignored. A felony last time I looked. Autonomy deal goes through.

        Meanwhile Larry goes public with how when Lynch was trying to flog Autonomy around the Valley they just laughed at the deal as it was such a patently obvious paper operation.

        Apotheker gets thrown overboard by Lane / Andressen who hang on a little longer but are soon ousted.

        HP suffers huge losses and directly or indirectly many tens of thousand of loyal, very competent HP employees lose their jobs and HP's reputation is left in even bigger tatters than after Carly Fiorina had left the building

        So no, Apotheker was not in the driving seat at HP. Unless you believe that the helmsman on the Titanic was they guy totally responsible for that unfortunate ice incident.

    2. Error403

      Re: Its a Fed Court so not a SF jury pool

      I testified in court on behalf of a company associated with this case last year, and was grilled by Adam Reeves for three hours, and subsequently by the jury. I was not impressed with the prosecutor's line of questioning, which were attempts to show Lynch as a control-freak and micro-manager on the financial side of things. But I was suprised at the atsuteness of the juror's questions. The jury were, as the O.P. said, drawn from the whole Bay Area, and diverse in age and demographic. I'm pretty sure that the jury followed this long case carefully in all its details, and that their conclusions were based on a really good understanding of the evidence. So I have no reason to doubt their verdict.

      1. JoeCool Silver badge

        Re: Its a Fed Court so not a SF jury pool

        Isn't a part of Lynch's defence that he's "just a Tech guy" and as a CEO doesn't have responsibility or insight into his CFOs adventures in audits ?

        Given that, why wouldn't a prosecutor try to establish that he was a controlling micro-manager.

    3. Anonymous Coward
      Anonymous Coward

      Re: Its a Fed Court so not a SF jury pool..so no one from SF then?

      Hands up among the down voters everyone who lives in San Francisco and has sat in the jury room in the Civic Center Courthouse on McAllister? Or even better, in the Superior Court judges chambers.

      That would be me.

      Hands up all the down-voters who are familiar with the politics of the Northern District Federal Attorneys office since the days of Senator Cranston?

      That would be me again.

      Hands up all the down-voters who know all about the political horse trading between Diane Feinnstein and Wille Brown since the days she was on the Board of Supes in the 1970's.

      Or why after many decades of municipal corruption in City Hall only in the last few years have people from the SFPW etc gone on trial and sent to jail.

      Boy this is getting predicable.

      Anyway. The justice system works differently in the US from the UK. And in SF even more so. Jury duty in SF is not like jury duty in the UK. Or even Marin or San Mateo County for that matter. When you Brits go into a Crown Court etc as jurors do you face a day of jury challenges? How about waste many weeks on a trial by show-boating bloviating lawyers that would be automatic binding arbitration / non jury / summary trial in the UK. And so on.

      In a City like SF jury duty is a very onerous burden that is avoided at all costs by most people. In Marin and San Mateo the effective jury pool is 90%+ of the population. In SF its less than 20%. Speak English and professional middle class etc. Then no escape in SF from losing many weeks of income if self employed. And the number of frivolous time wasting lawsuits demanding jury trials in SF courts is an order of magnitude greater than even Marin county. That bad. So if called to jury duty at the courthouse in Redwood City or Santa Venetia its usually not a too onerous duty. But get a call to Civic Center or even worse the Hall of Justice on Bryant, then its any tactic to get out of a totally wasting weeks / months hell.

      So thats why the Federal Court jury pool is much better, much higher quality and is a much fairer system than jury service in SF courts. And every other big US city too for that matter.

  12. Anonymous Coward
    Anonymous Coward

    Federal acquittals are extremely rare

    It’s worth noting that vanishingly few people fight federal criminal cases, and even fewer of them succeed. According to Pew, in 2022, only 1.4% of federal defendants went to trial, and only 0.4% of defendants were acquitted. Most people plead guilty.

    Whatever you think of Lynch, he had brass balls to take on the US government and win.

    I think the SFO needs to urgently explain why it ceded authority to the US, when it had concluded there was no realistic prospect of convicting Lynch in the UK. At the time it stated, “In order not to undermine the US-based investigation we are unable to go into further detail at this stage regarding the basis of these decisions”.

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