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Mike Lynch, once one of the UK’s leading tech entrepreneurs, was acquitted of criminal charges by a jury in San Francisco on Thursday, capping a 12-year legal saga stemming from one of Silicon Valley’s biggest-ever fraud cases.
The former Autonomy chief executive was accused of falsely inflating revenues at the UK software company ahead of its $11bn sale to Hewlett-Packard in 2011. The verdict is a moment of vindication for Lynch after a long battle that saw him extradited to the US and subjected to house arrest under 24-hour surveillance ahead of the trial.
Lynch, 58, has long claimed he was used as a scapegoat by HP for its own botched acquisition and later mismanagement of Autonomy. He unsuccessfully argued that any criminal charges should be heard in the UK. After a two-and-a-half-month trial, the jury, which began deliberating on Tuesday afternoon, found him not guilty on all counts, along with Stephen Chamberlain, Autonomy’s former vice-president of finance, who was also on trial.
Prosecutors accused Lynch and Chamberlain of illegally inflating revenues in the two years before the acquisition by backdating some of Autonomy’s contracts, using “round trip” deals to compensate customers for making purchases from Autonomy, and hiding the fact that some of its high-margin software revenue was really coming from unprofitable hardware sales.
They faced 14 counts of wire fraud and one count of conspiracy. Another charge, of securities fraud, was thrown out by the judge near the end of the trial.
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