DoJ charges Autonomy founder with fraud over $11BN sale to HP

U.Okay. entrepreneur turned billionaire investor Mike Lynch has been charged with fraud within the U.S. over the 2011 sale of his enterprise software program firm.

Lynch bought Autonomy, the massive information firm he based again in 1996, to pc large HP for round $11 billion some seven years in the past.

However inside a 12 months round three-quarters of the worth of the enterprise had been written off, with HP accusing Autonomy’s administration of accounting misrepresentations and disclosure failures.

Lynch has all the time rejected the allegations, and after HP sought to sue him in U.Okay. courts he countersued in 2015.

In the meantime, the U.Okay.’s personal Critical Fraud Workplace dropped an investigation into the Autonomy sale in 2015 — discovering “inadequate proof for a sensible prospect of conviction.”

However now the DoJ has filed costs in a San Francisco court docket, accusing Lynch and different senior Autonomy executives of creating false statements that inflated the worth of the corporate.

They face 14 counts of conspiracy and fraud, based on Reuters — a cost that carries a most penalty of 20 years in jail.

We’ve reached out to Lynch’s fund, Invoke Capital, for touch upon the newest growth.

The BBC has obtained an announcement from his legal professionals, Chris Morvillo of Clifford Probability and Reid Weingarten of Steptoe & Johnson, which describes the indictment as “a travesty of justice,”

The assertion additionally claims Lynch is being made a scapegoat for HP’s failures, framing the allegations as a enterprise dispute over the appliance of U.Okay. accounting requirements. 

Two years ago we interviewed Lynch onstage at TechCrunch Disrupt London and he mocked the morass of allegations nonetheless swirling across the acquisition as “spin and bullshit.”

Following the newest developments, the BBC experiences that Lynch has stepped down as a scientific adviser to the U.Okay. authorities.

“Dr. Lynch has determined to resign his membership of the CST [Council for Science and Technology] with quick impact. We respect the dear contribution he has made to the CST lately,” a authorities spokesperson informed it.

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