Judge Robles finds Mike Lynch innocent of HP’s fraud trial

Former Autonomy chief executive Dr Mike Lynch has finally emerged victorious after 13 long years of legal battles with Hewlett-Packard, one of Silicon Valley’s biggest fraud cases.

Lynch, who had been accused of falsely inflating revenues at the UK startup before its acquisition by HP for $11 billion in 2011, was cleared of all 15 counts of fraud and conspiracy following a 12-week trial.

Commenting on his acquittal, Dr Lynch stated: “I am elated with today’s verdict and grateful to the jury for their attention to the facts over the last ten weeks. My deepest thanks go to my legal team for their tireless work on my behalf. I am looking forward to returning to the UK and getting back to what I love most: my family and innovating in my field.”

This verdict is significant, as only 0.4% of federal criminal cases in the US lead to trial and acquittal, and just 12% of wire fraud prosecutions result in acquittal.

Christopher Morvillo and Brian Heberlig, Legal Counsel for Dr Lynch, added in a statement: “We are thrilled with the jury’s verdict, which reflects a resounding rejection of the government’s profound overreach in this case. The evidence presented at trial demonstrated conclusively that Mike Lynch is innocent. This verdict closes the book on a relentless 13-year effort to pin HP’s well-documented ineptitude on Dr Lynch. Thankfully, the truth has finally prevailed. We thank Dr Lynch for his trust throughout this ordeal and hope that he can now return home to England to resume his life and continue innovating.”

After the acquisition, HP faced major financial losses and claimed that $5 billion of the $8.8 billion write-down was due to Autonomy’s alleged inflation of revenues. Prosecutors accused Lynch and Autonomy’s former vice-president of finance, Stephen Chamberlain, of illegally inflating revenues and hiding high-margin software sales within unprofitable hardware sales.

However, in court, Lynch successfully argued that he had no involvement in accounting or contract matters, instead focusing on technical and marketing issues.

Despite his extradition and house arrest under 24-hour surveillance, Lynch maintained that he had been made a scapegoat by HP, who had bungled the acquisition and later mishandled the company’s software assets.

The US attorney’s office in San Francisco declared: “We acknowledge and respect the verdict. We would like to thank the jury for its attentiveness to the evidence the government presented in this case.”

Autonomy’s sale to HP was seen as a triumph for the UK’s thriving tech industry, with its groundbreaking software capabilities to sift through vast amounts of unstructured data viewed as the key to reviving HP’s declining hardware business.

Lynch, who co-founded Autonomy in 1996 out of a specialized software research group called Cambridge Neurodynamics, was awarded an OBE for his contributions to enterprise in 2006. He also served as a government adviser, sat on the boards of the BBC and British Library, founded the VC firm Invoke Capital, and invested in the successful cybersecurity company Darktrace.