British entrepreneur Mike Lynch, who began his criminal fraud trial in March, is due to testify in a US federal courthouse on Thursday.
The tech mogul faces 16 wire fraud, securities fraud, and conspiracy charges linked to his 2011 buyout deal with Hewlett-Packard (HP). Lynch has pleaded not guilty. If he gets convicted, he will face jail time of 25 years, according to The Guardian.
At the closing of Wednesday's proceedings, Lynch's legal team hinted at a mistrial over the prosecution's cross-examination. Lynch's lawyers will determine whether to submit a motion before the cord reconvenes on Thursday morning.
Autonomy-HP Buyout was Based on Lies: Authorities
Once called "Britain's Bill Gates," Lynch sold Autonomy to Hewlett-Packard in a deal that authorities say was based on "a series of lies." Authorities accuse Lynch of exaggerating Autonomy's sales, manipulating auditors, analysts, and regulators, and bullying critics.
A year after the $11.1 billion deal, from which Lynch got £500 million ($ 637 million), Computer hardware maker Hewlett-Packard acknowledged "serious accounting improprieties, disclosure failures, and outright misrepresentations," marking down the acquisition's value by $8.8 billion. Lynch claims HP mishandled Autonomy.
In his Thursday hearing in San Francisco, Lynch is expected to continue his defense, which links certain financial inconsistencies to US and UK accounting regulations and claims he did not make the decision.
Reid Weingarten, Lynch's lawyer, calls this client's fraud case a "routine business dispute" that became an "overblown fraud case." He informed the court that while the prosecution's case appears straightforward, the reality is more intricate.
"You're going to see in this trial that that ain't the way the world works," he said, adding that the world's operation is complex.
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(Photo : Dan Kitwood/Getty Images)
Mike Lynch, former chief executive officer of Autonomy Corp departs the Rolls Building on June 27, 2019 in London, England.
What to Expect From Mike Lynch Trial
Lynch faces accusations of operating a "massive" years-long scam and exhibiting a dictatorial style. Prosecutors described Lynch as a "controlling, dominating, and intimidating boss" and the "driving force" behind the fraud.
"Autonomy's financial statements were materially false and misleading," assistant US attorney Adam Reeves said, saying the business deceived auditors and investors "again and again" over 10 quarters and illegally inflated revenue between 2009 and 2011 to show growth.
Mike Lynch is anticipated to testify for several days. He fought extradition to the U.S. for years after his indictment in 2018 before leaving the U.K. last year, according to BBC.
Lynch co-founded Autonomy 1996, which developed software to extract usable information from "unstructured" sources, including phone conversations, emails, and video. It was among UK's top 100 companies.
A federal grand jury indicted Lynch in 2019, leading to his extradition from the UK to the US this May. He was released from house arrest in San Francisco after posting a $100 million bond and spent the past year preparing for his trial.
According to Michael Cusumano, a professor and deputy dean at MIT's Sloan School of Management, Lynch's trial would largely rely on what he knew and when, per Business Standard. He expects Lynch to blame his CFO and accounting team.
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