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. Like a badger

    No kidding?

    Saw the headline in a sidebar flash and thought you were having me on. I do so hope it's true and the dimwits at HP have to eat an $11bn slice of humble pie.

    1. Anonymous Coward
      Anonymous Coward

      Re: No kidding?

      I'm sure he is a t*** but it's always nice to see HP lose

      1. Lord Elpuss Silver badge

        Re: No kidding?

        "I'm sure he is a t***"

        Why? How? And how is this relevant? And why do you feel the need to utter it?

        Pointless comment.

        1. Headley_Grange Silver badge

          Re: No kidding?

          If you could go to prison just for being a twat then I know plenty of outlaws - myself included.

          1. Arthur the cat Silver badge

            Re: No kidding?

            If you could go to prison just for being a twat then I know plenty of outlaws - myself included.

            To save on building costs it would be cheaper to put the non-twats in prison for their own safety and leave the rest of us outside.

        2. Anonymous Coward
          Anonymous Coward

          Re: No kidding?

          The FRC found Deloitte auditors had serious failings and that reflected badly on both the auditors and Autonomy/Lynch/Hussain

          My personal opinion is that HP should have done full due diligence, understood what little due diligence was done (and the impact - some of HPs write downs were the direct result of how they merged entities choosing to crystalize tax for Autonomy acquisitions rather than allowing them to continue as separate entities to minimize tax) and negotiate a price closer to the actual value of the company at the time (~$5-6bn versus share price of $7bn). The HP board panicked and overpaid ($11bn) and were burnt because of their own mistakes far more than any potential...exaggerations or dodgy dealings....by Autonomy.

          Ref: https://www.theguardian.com/business/2020/sep/17/deloitte-fined-record-15m-for-failings-in-autonomy-audits

          1. Anonymous Coward
            Anonymous Coward

            Re: No kidding?

            Can hardly blame Deloitte when HP didn't read the due diligence report.

            1. Charlie Clark Silver badge

              Re: No kidding?

              PWC were supposed to do due diligence – which is generally designed to give the report the management wanted anyway – but I seem to recall HP waived due diligence, presumably because someone somewhere was leaning on them for a payout. Or Apotheker just wanted an impressive deal before he left and boost his own severance package. Whatever, they subsequently lost any recourse when it turned out that Autonomy had indeed be juicing results, but they didn't do it just for the takeover. Caveat emptor, which loosely translates as, Mine's a double because it's other people's money.

            2. Anonymous Coward
              Anonymous Coward

              Re: No kidding?

              Deloitte were Autonomys auditors and were sanctioned by the FRC for audit failings in annual audits in the 2 years leading up to the acquisition.

              HP used KPMG for approximately 3 days of due diligence and during that time KPMG and Autonomy managed to carry out a half-decent audit given KPMG had initially asked for 3 months to complete the audit process before HP stopped due diligence. The due diligence report was presented to the HP board but I suspect that may have been unwelcome...

          2. sanmigueelbeer
            Coat

            Re: No kidding?

            HP should have done full due diligence, understood what little due diligence was done

            HP did.

            Both the external and internal "due diligence" were ignored by Léo Apotheker "someone high up in HP". When the HP CFO objected, Léo Apotheker tried to get her fired ("Mad Leo tried to sack me over Autonomy, says top HP Inc beancounter").

            Instead of blaming HP themselves, HP is looking for someone outside of the company to blame (and claw back some billions).

            * First, Mike Lynch is their top priority. And HP may not stop until he's dead (or ran out of money).

            * Next one on the list may be the external auditor(s) who did "due diligence".

            * If they still can't get any money back, they'll find some poor sod at Wakanda to sue.

    2. Anonymous Coward
      Anonymous Coward

      Re: No kidding?

      It would be nice for those who signed off on the purchase of Autonomy to admit that they didn't read the due diligence report and overpaid as a result. An American mate who had HP stock during the Autonomy purchase thinks Leo Apotheker (and others) should be forced to admit that he's an idiot and pay back the large severance check he got.

      1. Yet Another Anonymous coward Silver badge

        Re: No kidding?

        A CEO taking responsibility for a massive acquisition fsckup?

        I think that's what they mean by un-American activities

        1. Charlie Clark Silver badge
          Pint

          Re: No kidding?

          You, sir, deserve one of these!

      2. Anonymous Coward
        Anonymous Coward

        Re: No kidding?

        I'm an operations management freelancer. Ages ago I got hired to help with an aquisition that had gone wrong. A private equity firm bought a company for its products because they could shift it into new and much bigger markets with potential for a decent top-line multiple. The consultancy that did the due diligence had focused on the financials and forecasts, not the actual factory making the products. After they completed the deal they found that the production lines were on the ragged edge of the possible. I got hired to try to get something out of it without building a new factory, but they lost* a lot on the deal vs their plan. As a result the PE hired me for a few of their subsequent deals to do due diligence on the operational side of potential buys alongside the consultants, who really focused on financial, forecasts and legal stuff. I guess that HP's greed and haste was likely the main cause of their Autonomy woes, but I do wonder if their consultants focused too much on the financials and not enough on the actual day-to-day operation.

        * "lost" as in didn't make as much money as they thought they would. They flipped it for about 3x topline growth when their expectation was a lot more. No prizes for guessing how we did it.

        1. I ain't Spartacus Gold badge

          Re: No kidding?

          I guess that HP's greed and haste was likely the main cause of their Autonomy woes, but I do wonder if their consultants focused too much on the financials and not enough on the actual day-to-day operation.

          I remember reading the draft report from, I think PwC, at time of the civil suit against Lynch in London. And it was purely financial. They had asked into one of the things that HP eventually blamed (and tried to claim was fraud) - which was Autonomy booking hardware and software sales together. Their software being a lot more profitable than hardware. They'd not got an answer by the time HP made the purchase, so it's just left as a comment about a question they'd asked on the draft that HP management admitted to not having read.

          I think hardware sales had, something like, doubled. So Autonomy's sales growth wasn't quite as impressive as it looked on the surface - as some of it was low-margin.

          However I got the impression from El Reg commentards that Autonomy's product wasn't all that amazing. The report doesn't cover that at all, as an HP comptetitor that should be entirely on them, to know their market. As they seemed to have compteting products of at least roughly similar quality, the purchase seems pointless from the outside.

          The report didn't cover Autonomy's development process - or ability to keep improving their software. Which HP may not have cared about, as they may have always been planning to hand development over to their own in-house teams. But is surely something you ought to check on such a large purchase, just as you should check the factory if you plan to buy a company and expand production.

      3. Charlie Clark Silver badge
        Facepalm

        Re: No kidding?

        Dear me: what kind of medication is your mate on?

        Not only would he have to pay back severance, he'd also likely to be subject of class action if he admitted anything.

    3. John Brown (no body) Silver badge

      Re: No kidding?

      "Saw the headline in a sidebar flash and thought you were having me on."

      Same here. I had to check the calender in case April 1st had sneaked up on me again!

  2. Forget It
    Thumb Up

    WOW

    that was unexpected

    (call off the lynch mob)

    1. Anonymous Coward
      Anonymous Coward

      Re: WOW

      :(

      -- former employee

      1. Throatwarbler Mangrove Silver badge
        IT Angle

        Re: WOW

        @AC: former employee of Autonomy? So you were hoping he'd be convicted? Do tell us more ...

        1. Altrux

          Re: WOW

          I am too - utterly grim place to work. The worst in my long and overly varied career!

          1. wyatt

            Re: WOW

            I interviewed for a pre-sales role flogging autonomy, I said no once I found out what the product was!

            1. Lord Elpuss Silver badge

              Re: WOW

              "I interviewed for a pre-sales role flogging autonomy, I said no once I found out what the product was!"

              Course you did. You and Gandhi.

              1. Anonymous Coward
                Anonymous Coward

                Re: WOW

                We had Autonomy demonstrated a number of times as various management had spoken with their sales people and we carried out a small proof of concept (it was supposed to grow but there was little points)

                It stored data but provided very little in the way of useful features to turn that data into useful insights for our business. We copied methods used for our existing products and got average reports/insights after a lot of effort - Autonomy pre-sales suggested we needed more consulting and a better product understanding when my teams opinion was it was that the consultants didn't know how to extract information better than we did and was just a general purpose data collection tool requiring a lot of effort when there were much better alternatives available.

                And I've had similar sales experiences with Dark Trace - vaguely useable, difficult to demonstrate the products value while there are MUCH better options available.

    2. David 132 Silver badge
      Thumb Up

      Re: WOW

      “Lynch” mob?

      ISWYDT.

  3. TrevorH

    Does indeed seem to be true, other news sites are reporting it in more detail like https://www.bbc.co.uk/news/articles/cneel8ed2vvo

    1. diodesign (Written by Reg staff) Silver badge

      More info coming

      Yeah it's true and we've got a full story coming. We were in the process of writing two versions, one for guilty and one for not guilty, but the jury beat us to it. Edit: Now updated,.

      C.

      1. Anonymous Coward
        Anonymous Coward

        Re: More info coming

        Interesting to see how this saga wraps up. Glad to hear there is a follow up post coming. I'd suggest a review of ye olde Reg's own coverage of the case in the period before the merger was finalized to the point HP had a basket of kittens.

        The coverage of Mike Lynch has really changed over the years, and not just here at the Reg. It wasn't really clear back then he was the bad guy in this story, and it would be a great contrast to wrap that up with the current evidence to show what we didn't know at the time of the merger, compared to now.

        There has always been a through line where HP just made a colossally dumb business deal and desperately wanted re-frame the narrative in a way it was somebody else's fault.

        To be clear, Lynch and the rest of the leadership team may still bear some responsibility, even if he's not doing decades behind bars, but HP face planted from the get go, rushing the acquisition and due diligence to close the deal at a price no sane person could rationalize. Now that Lynch is not the center of the story for a moment, it might be worth revisiting the other players, and their roles, and where they are now. (though that might be a hard read for the old HP crowd, the people that fired those people(or let them pursue other opportunities/time with their families), and the remains of both companies.

        1. Anonymous Coward
          Anonymous Coward

          Re: More info coming

          Makes me wonder who will be singing the same story of woe as HP after the current round of AI fever....

      2. Lord Elpuss Silver badge

        Re: More info coming

        Would be interested to read the 'other' version as well, ust because I'm interested in how the editorial process works.

        Not that you'd be allowed to publish it I guess. Accusations of fake news would abound...

        1. Korev Silver badge

          Re: More info coming

          Me too

  4. katrinab Silver badge
    Happy

    It has slightly restored my faith in the US justice system.

    Oracle knew it was overpriced, random commentards on here knew at the time it was overpriced. He had a duty to his shareholders to get the best price for their investment, and he did a good job there.

    1. Anonymous Coward
      1. F. Frederick Skitty Silver badge

        Oracle considered bidding for Autonomy, but walked away when it was clear HP were going to pay way over the odds.

      2. katrinab Silver badge

        Yes, they looked at buying it and decided to walk away.

      3. Anonymous Coward
        Anonymous Coward

        https://www.theguardian.com/business/2011/sep/29/oracle-autonomy-mike-lynch

        1. Anonymous Coward
          Anonymous Coward

          Also, some of the documents linked in the Guardian article can be found on the Wayback Machine:

          https://web.archive.org/web/20110930140048/https://www.oracle.com/us/corporate/features/please-buy-autonomy-503330.html

        2. AVR

          How did Lynch piss Oracle off so badly? Just denying that they'd discussed acquisition wouldn't normally produce that sort of response, with docs attached and all.

    2. anothercynic Silver badge

      Same here, Katrina.

      As much as I have a very dim view of the federal court system, this time it's done the job right.

      1. Pascal Monett Silver badge
        Trollface

        Everyone can make mistakes . . .

        1. Petalium

          …But at C-level you don’t have to pay for them

      2. Michael Wojcik Silver badge

        Personally, I think Lynch is guilty, and I think the UK trial established that beyond reasonable doubt.

        But particularly since HP, and in particular Apotheker, were wildly reckless and foolish — also convincingly established by the UK trial — I can't say I'm upset by Lynch being acquitted here. The US jury wasn't convinced, and they did their job in not returning a conviction. I'm fine with that.

        Even if HP were blameless, Blackstone's Ratio would apply. You want a conviction, you convince the jury beyond a reasonable doubt. If you can't, then the defendant should walk.

  5. Throatwarbler Mangrove Silver badge
    Devil

    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?

    1. Michael

      Re: Hilarious

      Well I feel pleased he was found not guilty.

      I still can't comprehend how a company the size of HP could have completed a purchase like that with performing due diligence. The blame all lay in the HP boards decisions.

      1. Yet Another Anonymous coward Silver badge

        Re: Hilarious

        Because it wasn't necessarily in HP's interest to do a deal - but it is in the interest of the individual at HP doing the deal

        They are going to appear on business sections of the TV news and in the business papers - so they are going to be familiar to people looking for their next CEO

        By the time the deal goes bad - all deals go bad or at least are obscured to the point that nobody knows if they were bad - they have moved on.

        They are just known as the person that worked on multi $Bn M&A deals

      2. Michael Wojcik Silver badge

        Re: Hilarious

        I still can't comprehend how a company the size of HP could have completed a purchase like that with performing due diligence.

        I can: Apotheker was a crap CEO. That's it, plain and simple. His own CFO told him it was a bad deal. He fired his own auditors (KPMG) without reading their preliminary report and before they delivered their final report — that's now a matter of record. He decided on a stupid course of action and refused to hear any arguments against it. Then he refused to own up to his mistake.

        The board should have shut him down, but they didn't because they weren't interested in doing their job either, and they didn't want to admit they were wrong to hire Apotheker in the first place.

    2. F. Frederick Skitty Silver badge

      Re: Hilarious

      The judge did his best to scupper the defence by disallowing any discussion of HP's actions post the takeover, but it looks like the jury saw what a lot of us who have followed this case for years saw. HP overpaid for Autonomy having not done their due diligence and despite reservations from some senior figures. As someone points out above, Lynch had a duty to the shareholders to get the best price, and he certainly succeeded.

      1. Michael Wojcik Silver badge

        Re: Hilarious

        Lynch had a duty to the shareholders to get the best price

        Nonsense. People need to stop repeating this canard. Even if there were such a duty (a highly dubious contention), it doesn't outweigh duty under the law.

        and he certainly succeeded

        Yes, fraudulently.

        But I'm just as happy he was acquitted. This is a classic case where neither side deserved to win, and under those circumstances I err on the side of liberty.

    3. Cruachan Bronze badge

      Re: Hilarious

      There were 2 schools of thought after the English trial (I specifically say English here as there's different legal systems in the UK), one was that Lynch would get away with it as the overwhelming tone of the coverage was that everyone at HP, with the possible exception of Cathie Lesjak who said don't buy them (and she was the CFO, but was ignored), was an idiot desperate to expand via acquisitions, and the other was that HP's markdown of Autonomy, being sued by their own shareholders and the general air of utter incompetence meant that they'd be desperate to find a scapegoat.

      IANAL but I won't deny I'm shocked that the legal cases have ended with the results the way they have.

      1. Anonymous Coward
        Anonymous Coward

        Re: Hilarious

        Lesjak should have resigned but did not. What's the point of a CFO who is OK to oversee $8bn of shareholder value being pissed away? Worthless.

        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.

    4. Missing Semicolon Silver badge

      Re: Hilarious

      Previous experience made this a wise move.

    5. 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.

    6. Jamie Jones Silver badge

      Re: Hilarious

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

    7. 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.

  6. 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.

  7. 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.

  8. 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.

  9. 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...

  10. 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.

  11. 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.

  12. 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 Bronze badge

      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.

  13. 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.

  14. 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

  15. 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.

  16. 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.

  17. 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”.

    1. diodesign Silver badge

      Re: Federal acquittals are extremely rare

      This is a really good point. Yes, vast majority of US DoJ cases are won by Uncle Sam.

      Not just the trial, Lynch had to go through extradition too. And won. That speaks for itself. Just that damages case in England to go.

      C.

    2. Androgynous Cupboard Silver badge

      Re: Federal acquittals are extremely rare

      The SFO has managed to bring about 10 cases in the last 20 years, barely, and has lost some important ones in the process. They're not really fit for purpose. Private Eye has been kicking them for years, it's quite eye-opening.

    3. Anonymous Coward
      Anonymous Coward

      Re: Federal acquittals are extremely rare

      The defendents' legal representatives are going to being finding their professional reputations lit up in stars. After pulling this result off (and, as you say, very much against the prevailing course of events), there's a good chance that they'll become the "go to" lawyers for any business person with a tricky altercation with the authorities to survive.

      There's surely going to have to be questions on both sides of the Atlantic as to "how has it come to this?". Criminal charges rejected by a jury so quickly suggests there was not much to the charges in the first place. I don't really care about Mike Lynch as such, but if US prosecutors and British courts combined are unable to weigh up the merits of a case with reasonable accuracy then the extradition system is undermined. There's much to criticise about current UK / US extradition arrangements.

      It'd be no good the judicial / prosecutorial authorities here or there pointing to an acquital as evidence that the extradition was sound, no harm done. No matter if you're a billionaire businessmen or a just an ordinary Joe, extradition is not a zero-cost, zero consequence process. Far from it. Extradition should happen only if it needs to happen, and this case is a hard to ignore indicator that the authorities either side of the pond have ****ed this one up. Next time, pretty much the same people could be making pretty much the same kind of arguments about a case involving you.

      I suspect that in this case the extradition process and the people who carry it out (US prosecutors, British courts) have probably been skewed by the "it's a lot of money" angle. If that's true, then that's an extremely bad thing. The "how much money?" angle should matter only when it comes to sentencing - if it gets that far. It should not play a part in the merits of the case and whether the case goes ahead or not.

      As a Brit, I'll be extremely interested to see if the British Judiciary ask themselves any questions about what they got wrong. I doubt they will; the judiciary seem not to be too keen in looking at the effectiveness of their own activities. The Post Office Horizon scandal is another example. There's a lot of inquiries going on into what's gone wrong there, but so far as I know none of them are asking why the Judiciary themselves did not spot that 700+ court cases, all very similar, had come before them to be heard. The Judiciary are there in part to ensure that cases are run safely, yet they demonstrated little by way of curiosity as to why hundreds of cases, all very similar, all very "computer says so" in nature, were suddenly being brought before them. Seven hundred. I mean, how disinterested can the judiciary get? Law and order depends entirely on the rule of law, but it's been ruling rather ineptly of late.

      p.s. I've no connection to any of the effected parties in HP vs Lynch et al, or to anyone involved in the Post Office scandal.

  18. Anonymous Coward
    Anonymous Coward

    Good. Onus was alway on HP to do due diligence. They failed.

  19. Anonymous Coward
    Anonymous Coward

    You’d have to be a morin…

    You’d have to be a moron to pay over market for an AI company in 2011. That stuff was never going to take off..

  20. luis river

    total decrepit history

    Too much years, too much witness, too much information folios, too much barristers, too much trans-atlantic ocean Jets, too much intrigue, too much gruesome whispering , too much doubts etc etc etc whole result there are here ...popular Jury overwhelming opinion said : MIKE totally CLEAN....... Total history abstract from american film "MARX BROTHER´s CABIN"....

    1. luis river

      Re: total decrepit history

      Donald Please: Make AMERICA great again !!

  21. TDog

    HP still has a damages claim in the civil courts.

    So what happens next? USA states no fraud; UK rules an offence committed. HP claims damages in UK. Will this be the nominal £1 paid into court rather than (from recollection) £4Bn?

    1. sanmigueelbeer
      Coat

      Re: HP still has a damages claim in the civil courts.

      HP will continue to pursue Mike Lynch until:

      a. A country (any country, for that matter) will find Mike Lynch guilty

      b. Mike Lynch dies

      c. HP runs out of money

      d. Mike Lynch runs out of money

      1. amanfromMars 1 Silver badge

        Re:"HP will continue to pursue Mike Lynch until:” @sanmigueelbeer

        It will be lawyers responsible for that ambulance chase, sanmigueelbeer, with them expecting a dead duck and suckered investors to pay them for their efforts trying to prove black is white and right is wrong.

        That’s criminal justice, Gangland Style.

        1. amanfromMars 1 Silver badge

          Re: HP will continue to pursue Mike Lynch until:” @sanmigueelbeer

          And if you want another example of criminal justice, Gangland Style ‽ :-) ......... Baby Reindeer: woman who claims to be real-life Martha sues Netflix for $170m

          There must be something psychoactive in the water over there in La La Land.

          1. Ken Hagan Gold badge

            Re: HP will continue to pursue Mike Lynch until:” @sanmigueelbeer

            Well if Netflix can make that sort of sum out of a show, then the penalty would need to be on that scale to avoid the moral hazard of defamation suits just being absorbed as a cost of doing business.

            (Disclaimer: I've no idea if that actually is the scale of profits from a moneyspinning TV series.)

        2. Anonymous Coward
          Anonymous Coward

          Re: HP will continue to pursue Mike Lynch until:” @sanmigueelbeer

          I initially read that as 'Gangnam Style'.

          Now I have visions of lawyers gang-naming into court in a quest for more money!

      2. Gordon 10

        Re: HP still has a damages claim in the civil courts.

        This. The only light at the end of the tunnel might be that if I recall correctly whilst the judge in the UK civil case whilst finding Lynch guilty was pretty scathing of HP. So it could be one of those settle for a token amount cases....

    2. Richard 12 Silver badge

      Re: HP still has a damages claim in the civil courts.

      Civil cases are "on the balance of probability", a much lower bar than the "beyond reasonable doubt" of criminal cases.

      It will certainly aid his appeal against the civil damages. The lawyers will get paid a lot more before this is over.

  22. Big Softie

    Surprising

    I would have thought HP's lawyers had a watertight case before going down the road of extradition.

    Unless it was HP's strategy all along to simply wear him down and hurt him publicly and financially on the basis their pockets will always bel deeper than his, even though the acquisition left him fabulously wealthy.

    1. Spazturtle Silver badge

      Re: Surprising

      Federal prosecutors have a 99.6% conviction rate, he was looking at 20 years behind bars if they convicted him. They must have been expecting him to take a deal.

  23. Will Godfrey Silver badge
    Thumb Up

    Humble Pie... for me

    As I quite publicly stated. I am indeed astonished by the result!

    I think it's absolutely the right one, but never thought it possible.

  24. Azamino

    Fly on the wall...

    I should have loved to see the reaction of Sushovan Hussain to the news that his boss walks (albeit after a huge amount of money spent on legal fees) while he spent five years in chokey!

  25. I Am Spartacus
    Thumb Up

    Well done elReg

    Thanks to el Reg's team of reporters, you kept this in the public eye.

    Pleased indeed to see the US Lawyers and HP's Due Diligence team reach for their latin dictionary to understand what Caveat Emptor means.

    Knives out for Pritti Patel and the UK courts for ever letting this get close to a US court. Lynch is a UK citizen. Autonomy was a UK company. The deal was done in the UK. If there ever was a case to answer it should have been in a UK court.

    1. amanfromMars 1 Silver badge

      Re: Well done elReg

      Knives out for Pritti Patel and the UK courts for ever letting this get close to a US court. Lynch is a UK citizen. Autonomy was a UK company. The deal was done in the UK. If there ever was a case to answer it should have been in a UK court. .... I am Spartacus

      The UKGBNI government and Intelligences services and civil servants, I am Spartacus, proven to be, beyond any shadow of doubt, poodles of the US of A administration/shadow government wonks.

      Ans ain't that the honest gospel truth .... in spades.

    2. Roo
      Windows

      Re: Well done elReg

      Tory Home Secretaries do seem to be very keen on deporting/exiling law abiding British Citizens and Tax Payers.

    3. amanfromMars 1 Silver badge
      Pint

      Re: Well done elReg. Praise where praise is due.

      Seconded, I am Spartacus.

      Three cheers and drinks on the house for Thomas Claburn and Chris Williams, who excelled in keeping us abreast and up tp date on the HP shenanigans from day one of the situation.

  26. plrndl

    A Cautionary Tale

    Hardware company in the doldrums can’t find a direction. Changes CEO at frequent intervals.

    Hardware company hires software company exec as CEO.

    New CEO buys expensive, trendy software company to become a software company.

    Hardware company replaces CEO, forgets about his strategy.

    Purchase becomes worthless.

    Hardware company blames software company execs for failure of the strategy.

    The end

    1. Colin Bull 1

      software company ...

      I thought the main thrust of HP's claim was that Autonomy overstated their hardware sales ....

  27. Anonymous Coward
    Joke

    The most astonishing thing here is...

    ... how they found an impartial jury.

    After all, who hasn't been screwed by HP's printer ink cartridge shenanigans at some point or other?

  28. Innique

    I worked for this ass hat and he was shopping the company the whole time. Larry Ellis at Oracle still has his pitch on Powerpoint. Smart guy, but no business ethics, gee that's not happening like all over the internet it's the wild west, what's legal in India is not legal in the states or Europe and they treat every country like they are the same.

  29. luis river

    To BE continued

    I DONT DOUBT, MIKE LYNCH SCREWED BY Hewlett Packard THE LAST 13 YEARS APROX 5000 DAYS, screwed ( with or without basement).. under suspicius, jailed, deported, with médical handicaps, límited personal life, and deteriored their managerial life, etc

    And after 6 june 2024 judge and overwhelming Jury veredict: MIKE its a "Totally charges free "

    Repeat I dont doubt ...Autonomy case, dont its film The End.

  30. This post has been deleted by its author

    1. amanfromMars 1 Silver badge
      Facepalm

      Re: Overreach @Anonymous Coward

      Have a downvote for that truly demonstrative example of overreach, AC.

      Black is not white and innocent of all charges is not guilty as prosecuted.

  31. MrGrumpy

    HP Leadership

    The clowns at the time should be doing the time.

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