Autonomy Co-founder Lynch Charged with Fraud

Mike Lynch, co-founder and former CEO of big data analytics giant Autonomy, has stepped down as an adviser to Prime Minister Theresa May, after being charged with fraud in the US relating to the company's $11bn sale to Hewlett-Packard (HP) seven years ago.

Founded in the UK in 1996, Autonomy initially specialised in the analysis of unstructured big data, and development of enterprise search and knowledge management apps using adaptive pattern recognition techniques based on Bayesian inference. Following its acquisition by HP in 2011, what is now known as HP Autonomy offers a portfolio including Voice of the Customer, media intelligence and big data analytics, in addition to Intelligent Data Operating Layer (IDOL), which is used for search and processing of text taken from both structured and unstructured information.

After the buy, HP investigators examined Autonomy's accounts and claimed that the deal had been massively over-inflated, with HP subsequently having to write down $8.8bn of Autonomy's value. The computer giant claimed the write-down had resulted from 'accounting improprieties, misrepresentations and disclosure failures' by the previous management, but Lynch (pictured) argued that the problems were down to HP's running of Autonomy.

In April, Autonomy's former CFO Sushovan Hussain was found guilty of fraud regarding the company's sale. According to the indictment against Lynch, filed in San Francisco federal court last Thursday, he used 'false and misleading statements' from 2009, 2010 and early 2011, to make Autonomy more attractive to a potential purchaser, and in the process, made $815m for himself when HP acquired his Autonomy shares. Lynch stands accused of fourteen counts of conspiracy and fraud for overstating Autonomy's financial performance ahead of its sale.

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.