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Mike Lynch, once one of Britain’s most successful technology entrepreneurs, will go on trial in San Francisco on Monday, 13 years after what U.S. prosecutors called Silicon Valley’s “biggest fraud in history.” It has become.
Lynch, who sold his software company Autonomy to Hewlett-Packard (HP) for $11.7 billion (10.7 billion euros) in 2011, is accused of falsifying Autonomy’s accounts in the two years before the deal. He was extradited from Britain last year after a five-year battle.
Lynch, along with Autonomy’s former vice president of finance, Stephen Chamberlain, are on trial on 16 counts of wire fraud and securities fraud, which carry a maximum sentence of 20 years in prison. The charges are similar to those for which Sushoban Hussain, the former chief financial officer of the Ministry of Home Affairs, was already sentenced to five years in prison.
A setback for Lynch came during pretrial hearings in recent weeks when some of the defense evidence he had hoped would be reliable was undermined. Judge Charles Breyer, who is overseeing the three-month jury trial, withheld some key evidence that the lawyers had planned to present.
The acquisition of Autonomy’s data analytics software played a central role in HP’s turnaround efforts, one of Silicon Valley’s founding companies that at the time was rebuilding around software. But a year after the acquisition, HP CEO Meg Whitman accused Autonomy’s previous management of falsifying accounting, leading to a $5 billion writedown. After that, she gave up on rebuilding her HP and dissolved the company.
Mr. Lynch sought to counter accusations against Mr. Whitman, claiming that Mr. Whitman himself was being made a scapegoat for his alleged mismanagement of the Autonomy business, and put a spotlight on the Silicon Valley celebrity’s reputation. Ta.
In addition to Ms. Whitman, a former eBay chief executive who is currently the U.S. ambassador to Kenya, the group also includes Frank Quattrone, a top Silicon Valley investment banker during the 1990s dot-com boom who worked with Oracle He was responsible for the sale of Autonomy after also being responsible for the sale of Autonomy to other companies such as and Cisco. . Quattrone is listed by prosecutors as a potential witness, along with Leo Apotheker, HP’s chief executive at the time of the transaction.
M. Lynch is also likely to appear in court, his lawyers told the judge, but limits on the evidence available preclude him from taking the case directly to a jury, his lawyers said. .
The United States is trying to portray the former head of the neighborhood association as a micromanager who had tight control over finances, including personally approving payments exceeding $30,000.
Mr Lynch’s lawyers have cited prosecution submissions showing that Mr Lynch delights in comparing himself to James Bond villains and that he keeps a tank of piranhas in Autonomy’s reception area. He succeeded in persuading Judge Breyer to dismiss the evidence he was seeking.
But the judge rejected the defense’s attempt to suppress two witness statements in which Mr. Lynch compared the company to the mafia, saying that even if it was a joke, it showed that Mr. Lynch had no control over the company. He said that it could be considered to be related to the degree.
In the biggest blow to the defense, the judge excluded nearly all evidence regarding the period after HP acquired Autonomy, making it difficult for Lynch to focus the spotlight on Whitman and other HP staffers. It has become.
According to the U.S. charges, Lynch and Chamberlain artificially siphoned off Autonomy’s revenue by backdating sales and making round-trip deals where customers were compensated if they made fake purchases of Autonomy’s software. The water has increased. The fraud charges include passing off low-margin hardware sales as software deals, giving the false impression that Autonomy’s software was growing much faster than it actually was. was.
– Copyright The Financial Times Limited 2024
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