UK tech founder Mike Lynch to face fraud trial in the US

British tech entrepreneur Mike Lynch's criminal trial kick off today in San Francisco in a case alleging accounting fraud charges that carry a maximum 20-year sentence.

A figurehead for the UK's burgeoning tech scene of the 1990s, Lynch will make his case to a jury for the first time after HP's decision to buy his analytics software firm Autonomy for $11 billion in 2011 resulted in allegations of fraud.

The US criminal trial follows a civil trial in the UK in which a judge found Hewlett Packard Enterprise had "substantially succeeded" in its multibillion-pound lawsuit against Lynch, who co-founded Autonomy in 1996, for fraud in company accounts leading up to the takeover. Earlier this year, HPE sought $4 billion (£3.17 billion) in damages relating to the case.

Lynch's team plan to appeal the civil case. They claim that the devaluation of Autonomy was due to HPE's mismanagement of the company it acquired, rather than accounting fraud.

In February last year, Lynch lost a long-running battle to avoid extradition to the United States to face criminal charges relating to HP's acquisition of Autonomy.

HPE's reputation took a hit in 2012 after it announced to investors it would make a $8.8 billion writedown on the acquisition, at the same time alleging "serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy that occurred prior to HP's acquisition."

Lynch has always denied any wrongdoing.

Today, Lynch is set to be tried with Stephen Chamberlain, former VP of finance at Autonomy. Charges include 16 counts of wire and securities fraud. In 2018, Sushovan Hussain, former chief financial officer of Autonomy, was found guilty of fraud at the US federal district court in San Francisco after pleading not guilty. He was handed down a five-year prison sentence.

However, in a setback for Lynch, the judge dismissed some of the evidence detailing the alleged mismanagement that his lawyers had tried to introduce in the criminal trial.

In recent developments, Lynch, as of Thursday [PDF] has succeeded in convincing the judge to allow him to bring certain items to court. Among the binders, files, printer, AV kit and assorted HDMI and power cables are boxes of snacks, hand sanitizer, and Lysol disinfectant wipes.

The judge also granted Lynch permission to be accompanied by an unarmed security guard. ®