Autonomy's former CEO, Mike Lynch, made the statement Thursday after being acquitted of criminal charges, ending a 13-year legal battle with Hewlett-Packard that was one of Silicon Valley's biggest fraud cases. Lynch was accused of falsely inflating revenues at the British startup before Autonomy was sold to HP in 2011 for $11 billion.
Commenting on the acquittal, Lynch (pictured above, left, appearing at TechCrunch Disrupt) said in a statement: “I am overjoyed by today's verdict and thank the jury for their open eyes to the facts over the past 10 weeks. I would like to extend my sincere thanks to my legal team who worked tirelessly on my behalf. I look forward to returning to the UK and getting back to what I love most – my family and innovating in my field.”
After a 12-week trial, the entrepreneur was acquitted of 15 charges of fraud and conspiracy charged in connection with the 2011 takeover.
Lynch's victory is notable given the fact that only 0.4% of federal criminal cases in the United States went to trial and ended in an acquittal in fiscal year 2022, and only 12% of all wire fraud prosecutions resulted in an acquittal, according to the Pew Research Center.
Lynch's legal advisers, Christopher Morvillo and Brian Heberlig, added in a statement: “We are thrilled with the jury's verdict, which represents a firm rejection of the government's overreach in this case. The evidence presented at trial conclusively proved Mike Lynch innocent. This verdict brings to an end 13 years of relentless efforts to pin HP's well-documented incompetence on Dr Lynch. Thankfully, the truth is finally out. We thank Dr Lynch for his confidence throughout this ordeal and hope he can return to the UK to resume his life and continue innovating.”
Lynch, 58, has already been extradited to the United States and is under house arrest and 24-hour surveillance ahead of his trial. He has long argued that HP made him a scapegoat for its failed acquisition of Autonomy and subsequent mismanagement of the company's software assets.
Lynch made £500m from selling Autonomy to HP, but just a year later HP wrote down its investment by $8.8bn, saying $5bn of that was due to practices by Autonomy's previous management that had overestimated Autonomy's value and misled potential buyers into believing the company was worth much more.
Prosecutors charged that Lynch and Autonomy's former vice president of finance, Stephen Chamberlain, illegally inflated revenue before the acquisition and hid high-margin software revenue within unprofitable hardware sales.
At trial, Lynch argued that he had not been involved in accounting or contractual matters, but had instead focused on technical and marketing issues, and he won.
Lynch unsuccessfully argued that he should be tried in Britain, leading to his extradition, but a US jury acquitted him of all charges, along with Chamberlain, who was also on trial.
The U.S. attorney's office in San Francisco said in a statement: “We acknowledge and respect the verdict and want to thank the jury for paying attention to the evidence presented by the government in this case.”
Autonomy's sale to HP was seen as a vindication of the UK's burgeoning technology industry, and the platform's ability to mine unstructured databases was seen at the time as a way for HP to turn around its ailing hardware business.
Lynch co-founded Autonomy in 1996 out of a specialist software research group called Cambridge Neurodynamics.
Lynch, who was made an OBE in 2006 for services to enterprise, has served as an adviser to the UK Government, served on the board of directors of the BBC and the British Library, and founded Invoke Capital VC, which invested in cybersecurity start-up Darktrace.