After years of controversy, HP won a civil fraud case against Autonomy founder and CEO Mike Lynch. resolutionThe biggest civil fraud trial in British history took place just hours before the UK Home Secretary approved Lynch's extradition to the United States to face new fraud charges.
The UK High Court found that HP had “substantially succeeded” in proving that Autonomy executives had fraudulently increased its reported revenue, profits and company value. HP paid $11 billion for the company back in 2011 and later announced an $8.8 billion writedown. In court, HP sought $5 billion in damages, but the judge said the total amount of damages due would be “significantly less” and announced it later. Kelvin Nicholls, Lynch's lawyer and partner at law firm Clifford Chance, said his client intends to appeal the High Court decision. In a later statement, Nicholls said his client would also appeal the extradition order to the UK High Court.
This week's events are the latest twist in an extradition process that began in November 2019, when the U.S. Embassy in London requested that Lynch be tried in the United States on 17 counts, including wire fraud, conspiracy and securities fraud. Lynch denies all charges brought against him. Nicholas Ryder, professor of financial crime at the University of the West of England, describes it as a “Colt .45 for the US Department of Justice” – a comprehensive and powerful move. “This is their primary charge. The consequences for Mr. Lynch will be significant.”
At the time of the Autonomy acquisition, HP's then-chairman said he was “seriously cool” about the deal, according to statements later presented in court. The company said that certain former members of Autonomy's management team “used accounting irregularities, misrepresentations and failure to disclose information to inflate the company's underlying financial performance.” [Autonomy]” Among them was Lynch, then the firm's CEO.
