British tech entrepreneur Mike Lynch’s acquittal by a San Francisco jury on Thursday night has significant implications. The founder and former chief executive of Autonomy, a software company listed on the FTSE-100, was cleared of criminal charges alleging that he fraudulently inflated the company’s revenues before its acquisition by Hewlett-Packard (HP) for $11 billion in 2011.
Facing odds stacked against him, Dr. Lynch, a British businessman who was extradited to the United States to stand trial, chose to plead not guilty. This is a rare occurrence, as the majority of defendants in US criminal cases tend to reach a plea bargain in order to receive a more lenient sentence. The punishment for being found guilty at trial in the US is notoriously severe, with Dr. Lynch facing a potential 20-year prison sentence if convicted.
As a mathematician specializing in probability, Dr. Lynch was well aware of the slim chances of being acquitted. According to analysis by the Pew Research Centre, only 0.4% of defendants in US federal criminal cases who went to trial in 2022 were acquitted. This makes Dr. Lynch’s decision to go to trial all the more daring, especially considering that his former colleague, Sushovan Hussain, was found guilty in 2018 over the same case and sentenced to five years in prison.
Despite the odds, Dr. Lynch was determined to have his day in court and tell his side of the story to the jurors. At the heart of his defense was the argument that, as a tech expert and start-up specialist, he was not deeply involved in Autonomy’s accounting practices. His lawyer, Reid Weingarten, emphasized this point to the jurors, stating that Dr. Lynch was “a start-up guy who liked to be eating cold pizza at two in the morning while inventing something.” This message resonated with the jurors, as Dr. Lynch’s witnesses also testified that he was not involved in accounting issues. Jonathan Bloomer, who chaired Autonomy’s audit committee, stated that Dr. Lynch was more interested in strategy and new products, and did not attend audit committee meetings.
Dr. Lynch himself took the stand to emphasize his lack of involvement in accounting matters, telling the jurors that he had never met many of the witnesses produced by federal prosecutors and had no involvement in the transactions they were referring to. He also shared personal anecdotes, such as growing up as the son of Irish immigrants in 1970s Essex and his passion for breeding rare-breed pigs and cattle on his Suffolk farm.
The acquittal of Dr. Lynch will reignite the debate over whether he should have been extradited to the US to stand trial. Politicians and business leaders in the UK have long argued that the case should have been heard in the UK, as Autonomy was a UK-listed, UK-regulated, and UK-audited company. The Serious Fraud Office even launched an investigation into the takeover but ultimately dropped it in 2015. This has brought attention to the one-sidedness of the extradition treaty signed with the US by Tony Blair’s government in 2003. Dr. Lynch is just one of many British business people who have been extradited to the US to face trial, while the UK has been unable to secure the extradition of US citizens, such as Anne Sacoolas, who caused the death of British teenager Harry Dunn by careless driving in 2019.
The cross-party support Dr. Lynch received in his fight against extradition reflects the frustration and concern over the extradition treaty. Former Brexit secretary David Davis, security minister Tom Tugendhat, and former Liberal Democrat leaders Sir Vince Cable and Sir Menzies Campbell were among those who rallied to his cause. They pointed out that, under the terms of the treaty, three times as many people have been sent from the UK to face trial in the US than have gone the other way. Mr. Davis expressed his support for Dr. Lynch’s acquittal, stating that “the Mike Lynch case is a fantastic correction of a miscarriage of justice which we have been fighting for a number of years.”
Dr. Lynch’s extradition in January 2022 and subsequent trial have taken a toll not only on him but also on his family. He was placed under 24-hour armed guard in San Francisco, away from his wife and daughters who were unable to attend the trial due to university and A-level exams. The trial also brought negative attention to another former FTSE-100 company, Darktrace, in which Dr. Lynch’s investment company was the first to back and remained the largest shareholder until 2018. In August 2022, Dr. Lynch stated that the US authorities’ “vindictive pursuit” of him had “depressed [Darktrace’s] share price” and left it vulnerable to a takeover by a US private equity company. This warning proved true when, in April this year, Darktrace was acquired by the
