Mar 18, 2024 - Business

Silicon Valley's next great fraud trial begins

Illustration of a digitally drawn 12 billion dollar bill with an unsure Lady Justice.

Illustration: Annelise Capossela/Axios

Michael Lynch on Monday goes on trial in San Francisco for allegedly defrauding Hewlett-Packard during the $11.7 billion sale of Autonomy, an enterprise software company he co-founded and led as CEO.

Why it matters: This is the highest-profile Silicon Valley fraud case since Elizabeth Holmes and Theranos, and much larger in terms of dollars lost.

The big picture: Buying Autonomy might have been the worst of HP's many disastrous deals, resulting in an $8.8 billion write-down and setting the stage for its 2016 breakup.

Behind the scenes: Prosecutors allege that Lynch and a colleague inflated Autonomy's revenue, thus tricking HP.

  • Lynch has long argued that HP and its former CEO Meg Whitman bungled Autonomy post-acquisition, but neither he nor other former Autonomy executives have gotten U.S. or U.K. courts to agree in prior civil and criminal cases.
  • He also raised around $1.2 billion for a venture capital fund called Invoke Capital after being fired by HP, and was extradited to the U.S. last spring.

The bottom line: If found guilty, Lynch could be sentenced to prison.

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