British tech founder Mike Lynch’s lawyer finds not guilty in US fraud trial By Reuters

Jody Godoy and Abhirup Roy

SAN FRANCISCO (Reuters) – Mike Lynch’s lawyers on Monday portrayed the British tech pioneer as a seasoned entrepreneur, while prosecutors in a San Francisco court branded him a greedy fraudster, with a jury finding Lynch guilty of fraud in his $11 billion acquisition of Hewlett-Packard. The charges against him will soon be assessed. his software company

The 2011 deal was one of the UK’s largest tech deals at the time, but quickly fell through. HP (NYSE:) valued Autonomy at $8.8 billion within a year of the acquisition.

Assistant U.S. Attorney Robert Leach told jurors in closing arguments that there should be no reasonable doubt that there was fraud at Autonomy and that Lynch directed it.

Federal prosecutors urged jurors to trace the money, saying Lynch made 500 million pounds ($640 million) from the HP deal.

“Dr. Lynch had 500 million reasons to defraud HP, which tells us who was in charge and who benefited,” Rich said.

Lynch and former Autonomy financial executive Stephen Chamberlain were indicted on fraud and conspiracy charges for allegedly plotting to inflate the company’s profits starting in 2009, in part to lure buyers.

The Cambridge University-educated entrepreneur represented himself at trial, denying wrongdoing and telling jurors that HP had failed to integrate the two companies.

Lynch’s attorney, Brian Havelick, told jurors Monday that the testimony had a devastating impact on the prosecution’s case.

“It was beyond reasonable doubt. It was the truth,” jurors said after seeing a large photo of Lynch overlaid with the tech founder’s descriptions, including ‘smart’ and ‘focused on the future.’

Lynch’s defense team scored a victory last week when U.S. District Judge Charles Breyer dismissed a count of securities fraud that was not supported by the evidence. Lynch still faces one count of conspiracy and 14 counts of wire fraud.

Prosecutors said the pair financed Autonomy in a variety of ways, including “round-trip” deals that advanced cash to customers through backdated contracts and sham contracts.

In a trial that began in mid-March, jurors heard from more than 30 government witnesses, including former HP CEO Leo Apotheker, who was fired weeks after the Autonomy deal was announced.

Lynch’s legal team argued that HP was so eager to acquire Autonomy before potential competitors that it rushed due diligence before the sale.

On the stand, Lynch said he was focused on technology issues and left funding issues and problematic accounting decisions to Autonomy’s then-chief financial officer, Sushovan Hussain.

Hussein was separately convicted in a 2018 trial in the same court of conspiracy, wire fraud and securities fraud related to his dealings with HP. He was sentenced to five years in prison and was released from a U.S. prison in January.

Lynch is one of Britain’s leading technology entrepreneurs and has been compared to Apple (NASDAQ:) co-founder Steve Jobs and Microsoft (NASDAQ:) co-founder Bill Gates.

The acquisition of Autonomy was intended to revitalize HP’s software business. Instead, it sparked a series of bitter and expensive legal battles.

HP won a major civil suit against Lynch and Hussein in London in 2022, but the amount of damages has not yet been determined. The company is seeking $4 billion.

Final arguments in the case are expected to conclude Tuesday before jury deliberations begin.