Mike Lynch, the ex-Autonomy boss, charged with fraud in the US

Mike
Lynch will fight the charges.
Ben
Gurr/WPA Pool/ Getty Images

• The US has charged British tech billionaire Mike Lynch
  with 14 counts of fraud over the sale of his company Autonomy
  to Hewlett-Packard in 2011.
• The charges allege that Lynch and Autonomy’s former vice
  president for finance, Stephen Chamberlain, inflated the firm’s
  earnings from 2009 to 2011.
• “These stale allegations are meritless and we reject them
  emphatically,” Lynch’s lawyers said in a statement.

The US has charged British tech billionaire Mike Lynch with fraud
over the sale of his company Autonomy to Hewlett-Packard.

Lynch sold Autonomy to HP for $11.7 billion (£9.2 billion) in
2011. A year later, HP’s CEO claimed the company had wildly
inflated its earnings, and subsequently wrote it down by $8.8
billion. In response Lynch launched a countersuit, claiming HP
was scapegoating him for its own incompetence.

On Thursday, the US Department of Justice filed 14 charges of
fraud against Lynch in a San Francisco court, along with
Autonomy’s former vice president for finance Stephen Chamberlain.
The charges carry a maximum sentence of 20 years in prison.

The
charges allege that Lynch and Chamberlain inflated Autonomy’s
earnings from the beginning of 2009 until October 2011, when it
announced its sale to HP. The DoJ is also seeking to make Lynch
return the $815 million he made from selling Autonomy.

In a statement sent to Business Insider, Lynch’s lawyers said he
will “vigorously defend” the charges. Clifford Chance’s Chris
Morvillo and Reid Weingarten, of Steptoe & Johnson, said:

“This indictment is a travesty of justice. Mike Lynch is a
world-leading entrepreneur who started from nothing and spent his
life building a multi-billion dollar technology business that
solved critical problems for companies and governments all around
the world. These stale allegations are meritless and we reject
them emphatically.

“This case is unsupportable. It targets a British citizen with
rehashed allegations about a British company regarding events
that occurred in Britain a decade ago. It has no place in a US
court. The claims amount to a business dispute over the
application of UK accounting standards, which is the subject of a
civil case with HP in the courts of England, where it belongs.

“There was no conspiracy at Autonomy and no fraud against HP for
the DoJ to take up. HP has a long history of failed acquisitions.
Autonomy was merely the latest successful company it destroyed.
HP has sought to blame Autonomy for its own crippling errors, and
has falsely accused Mike Lynch to cover its own tracks.

“Mike Lynch will not be a scapegoat for their failures. He has
done nothing wrong and will vigorously defend the charges against
him.”

Autonomy’s former chief financial officer Sushovan Hussain was

convicted of fraud in April. Hussain is
currently trying to overturn the conviction.

Lynch was also an early investor in
UK-based cybersecurity unicorn Darktrace. According to its
last filing at Companies House, Lynch is a director at Darktrace.