Autonomy founder Mike Lynch, once hailed as the British Steve Jobs, was acquitted of fraud charges by a San Francisco jury on Thursday, a major win for the entrepreneur who has been dogged by legal troubles since his company was sold to Hewlett-Packard in 2011 for $11 billion.
Lynch’s attorneys and U.S. prosecutors said he was acquitted of all 15 charges, including one conspiracy count and 14 wire fraud counts related to certain transactions and communications.
Stephen Chamberlain, a former Autonomy financial executive who faced the same charges at trial as Lynch, was also acquitted of all charges, Lynch’s attorneys said.
The trial, in which prosecutors alleged that Messrs. Lynch and Chamberlain conspired to inflate Autonomy’s revenue, was the latest chapter in a legal battle that grew out of the failed deal.
The sale of Autonomy was one of the UK’s largest technology deals at the time, but it quickly fell apart and HP wrote down the value of Autonomy by $8.8 billion within a year.
During the trial, which lasted three months, jurors heard testimony from more than 30 government witnesses, including Leo Apotheker, HP’s former CEO, who was fired just weeks after the Autonomy deal was announced.
Lynch took the stand in his own defense at trial, denied any wrongdoing, and told jurors that HP had failed to integrate the two companies.
Prosecutors said Lynch and Chamberlain inflated Autonomy’s finances in a variety of ways, including backdated contracts and “round-trip” transactions in which they advanced cash to customers through sham contracts.
Lynch’s lawyers argued at trial that HP was eager to acquire Autonomy before potential competitors and therefore rushed to complete its due diligence before the sale.
The Cambridge-educated entrepreneur said on the stand that he focused on technology issues and left financial matters and the accounting decisions in question to Autonomy’s then-Chief Financial Officer, Sushoban Hussain.
Hussain was released from a U.S. prison in January after serving a five-year sentence after being separately convicted of charges related to the HP deal at the same court in 2018.
Lynch is one of Britain’s leading technology entrepreneurs, and has been compared to Apple co-founder Steve Jobs and Microsoft co-founder Bill Gates.
Lynch used his groundbreaking research at Cambridge University to found Autonomy, which has become the UK’s largest software company and a constituent of the blue-chip FTSE 100 index.
He was praised by academics and scientists and was asked to advise the UK government on technology and innovation.
The Autonomy acquisition was meant to revitalize HP’s software business, but it sparked a series of bitter and costly legal battles.
HP largely won its civil lawsuit against Lynch and Hussain in London in 2022, but damages have yet to be determined: the company is seeking $4 billion.
