In a stunning verdict delivered at midday on Thursday in San Francisco’s federal courthouse, Mike Lynch, co-founder and former CEO of UK software company Autonomy, was found not guilty on all counts. The acquittal comes more than 12 years after Lynch was accused of orchestrating the biggest fraud ever to hit Silicon Valley.
A Moment of Vindication:
Lynch, once a leading figure in the UK tech scene, briefly covered his face with his hands as the words “not guilty” were read out 15 times. His wife rushed to embrace him moments later. The verdict marked the end of a grueling legal ordeal that saw Lynch spend a year under house arrest in San Francisco, wearing an ankle bracelet and under 24-hour supervision.
A Blow to US Prosecution:
The acquittal is a significant setback for US prosecutors, who had already secured the conviction of Autonomy’s top finance executive, Sushovan Hussain, on similar charges. Lynch’s charges stemmed from the $11 billion sale of Autonomy to Hewlett-Packard (HP) in 2011, with allegations of revenue inflation leading to a $5 billion overpayment by HP. Despite previous civil rulings against Lynch and an ongoing $4 billion damages claim from HP, the criminal case faced numerous challenges.
Trial Challenges and Defence Strategy:
The prosecution struggled to present a clear, concise case, often bogging down the jury with complex financial details. Judge Charles Breyer, who presided over the case, noted the prosecution’s difficulty in making their points effectively. Lynch, on the other hand, presented a calm and controlled demeanor on the stand, occasionally injecting humor into his testimony and distancing himself from the day-to-day financial operations of Autonomy.
Public Perception and Final Remarks:
Lynch’s defense centered on the argument that HP’s mismanagement post-acquisition was to blame for any perceived issues, a point he was restricted from making in court. Nevertheless, his performance and the prosecution’s inability to directly link him to fraudulent activities swayed the jury.
Stephanie Siegmann, a former prosecutor, highlighted the difficulty in portraying HP as a sympathetic victim, contrasting this case with other high-profile tech fraud cases involving individual investors.
Future Implications:
While Lynch expressed relief and a desire to return to his entrepreneurial endeavors, he still faces potential financial repercussions from ongoing civil litigation. The acquittal, however, represents a significant victory and a potential turning point in his career.
