Former UK Tech Titan Mike Lynch Faces Trial in US Over Silicon Valley's Fraud, Conspiracy Charges

By Leira Aquino

Mar 17, 2024 11:10 PM EDT

Former tech mogul Mike Lynch faces trial in San Francisco, United States over Autonomy's alleged financial misconduct. The trial follows Lynch's $11.7 billion sale of Autonomy to Hewlett-Packard 13 years ago.
(Photo : Dan Kitwood/Getty Images)

Mike Lynch, once hailed as one of the UK's most successful tech entrepreneurs, is poised to begin a trial in San Francisco, United States (US) on Monday, facing allegations of orchestrating "the largest fraud in the history" of Silicon Valley, as described by US prosecutors.

The trial comes 13 years after Lynch sold his software company Autonomy to Hewlett-Packard for a staggering $11.7 billion in 2011. 

Mike Lynch Goes on Trial in US

Lynch faces charges related to the alleged falsification of Autonomy's accounts in the lead-up to the acquisition

Lynch, alongside Stephen Chamberlain, Autonomy's former vice-president of finance, will face trial on 16 charges of wire and securities fraud, with each charge potentially leading to a maximum sentence of 20 years.

This echoes allegations that resulted in a five-year prison term for former Autonomy chief financial officer Sushovan Hussain. 

In the pre-trial phase, Lynch encountered setbacks as Judge Charles Breyer, presiding over the trial, excluded some of the defense's key evidence.

The acquisition of Autonomy was a pivotal move for Hewlett-Packard, as it aimed to pivot from hardware to software dominance. 

However, a year after the acquisition, HP's CEO at the time, Meg Whitman, accused Autonomy's former management of accounting irregularities, resulting in a $5 billion write-off.

Lynch has vociferously denied the allegations, asserting that he's being scapegoated for HP's own mismanagement of Autonomy. His defense has spotlighted figures like Frank Quattrone, who handled the Autonomy sale, and former HP CEO Léo Apotheker as potential witnesses.

The prosecution's case paints Lynch as a micromanager with direct oversight over Autonomy's finances, including personal approval of payments exceeding $30,000, as per the Financial Times.

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Lynch's Defense Struggles as Trial Unfolds

As the trial unfolds, Lynch's defense faces challenges, with Judge Breyer, who presides over the Northern District of California, limiting the admissibility of certain evidence and questioning the relevance of post-acquisition accounting data.

Moreover, Judge Breyer's involvement in Hussain's trial, which resulted in a conviction on similar charges, further complicates Lynch's situation.

Despite lobbying efforts directed at the British government, Lynch's attempt to evade extradition was unsuccessful last year. 

The British government, which had sanctioned his transfer to the United States, greenlit his extradition on the very day when a judgment was rendered against him in the civil case initiated by HP.

Following his extradition, Lynch has been under continuous surveillance and private security as mandated by the court, according to the New York Times.

The trial's outcome holds significant implications for Lynch, who has consistently maintained his innocence. The trial is expected to last several months, with Lynch's defense team vigorously contesting the prosecution's allegations. 

Lynch's fate now rests in the hands of the jury as they weigh the evidence presented in this high-stakes legal battle.

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