Posted on November 30, 2018 by staff

British tech entrepreneur charged with fraud

British tech entrepreneur charged with fraud

The US is charging Lynch
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The US is charging Lynch

Former Autonomy chief executive and co-founder Mike Lynch has been charged with fraud in the US over the $11 billion sale of the company to Hewlett-Packard in 2011.

The criminal charges carry a maximum term of 20 years in prison, and the US is also looking for Lynch to forfeit $815 million, which the court documents say he made from 14 counts of fraud.

Lynch’s lawyers say he will “vigorously defend the charges”.

The UK software giant had headquarters in San Francisco and Cambridge, before being snapped up by HP. Earlier this year the company’s former finance chief Sushovan Hussain was found guilty of accounting fraud.

The charges state that between 2009 and 2011 Lynch and Stephen Chamberlain, vice president of finance, along with several others, overstated Autonomy’s revenues and made misleading statements to regulators and market analysts.

They are also charged with intimidating, pressuring and paying off people who “raised complaints about or openly criticized Autonomy’s financial practices and performance”.

Lynch’s lawyers, Chris Morvillo of Clifford Chance and Reid Weingarten of Steptoe & Johnson, said in a statement the indictment was “a travesty of justice”. It went on to say Lynch was a scapegoat for HP’s failures.

“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,” said Morvillo.

Since leaving Autonomy, Lynch has become an investor through Invoke Capital, which included the backing of UK cyber security unicorn Darktrace.