Statement on behalf of Dr Mike Lynch from his lawyers Christopher
Morvillo and Reid Weingarten
February 5, 2020
Lynch has submitted himself for arrest, a formality required as part of
the extradition process initiated by the US Department of Justice (DOJ).
This case has wider implications for British business. The US claims
concern alleged conduct in the UK. Dr Lynch is a British citizen who ran
a British company listed on the London Stock Exchange, governed by
English law and UK accounting standards. This extradition request
reflects yet another example of the DOJ's attempts to exert
extraterritorial jurisdiction over non-US conduct. The forum bar in the
UK Extradition Act was enacted by the UK Parliament to protect British
citizens from such a scenario.
Dr Lynch vigorously rejects all the allegations against him and is
determined to continue to fight these charges.
Since Hewlett-Packard (HP) first raised these allegations more than
seven years ago, Dr Lynch has steadfastly denied them and has worked
hard to properly respond and set the record straight. The UK Serous
Fraud Office previously investigated and did not pursue the allegations.
Dr Lynch has now answered HP’s claims in the appropriate forum, the High
Court in London, where he attended court every day of the 10-month
trial. During that trial, Dr Lynch testified about all of these
allegations for more than 20 days. He has not hidden, nor has he shied
away from defending his conduct. Having patiently and diligently
defended the case in England for several years, he awaits the civil
trial judgment. The US DOJ should not have commenced extradition
proceedings prior to the judgment of the English High Court.
Alex Bailin QC, said in court:
Dr. Lynch categorically denies all the allegations against him and
will be resisting extradition on the basis of the forum bar. These
matters concern a British citizen, UK-based conduct, a UK listed plc,
culminating in a UK civil trial in which judgment is pending – these
matters unquestionably belong here in the UK. The forum bar exists to
provide real protection against this interventionist type of action and
this, we will say, is a paradigm forum bar case.
I can also say that the superseding indictment, reaching back and
spanning almost a decade, is breathtakingly broad. The jurisdictional
claim here is unwarranted and immediately raises questions about whether
this court's process is being abused and issues of dual criminality.
On 22 March 2019, a superseding indictment was filed against Mike
Lynch in the United States. In response, Dr Lynch’s lawyers, Chris
Morvillo of Clifford Chance and Reid Weingarten of Steptoe & Johnson,
issued the following statement:
These new allegations are simply preposterous.
For the last 6 years, Mike Lynch has been diligently and responsibly
responding to HP’s specious allegations, guided and surrounded by more
lawyers than he would care to count. At all times he has acted lawfully
and professionally in defending himself and his work at great personal
Simultaneously, and despite all odds, Mike Lynch has built another
billion-dollar UK company. He has helped former colleagues who lost
their jobs (because of these allegations), secure employment to support
their families at normal rates for their fulltime work. He has also
generously helped former colleagues hire lawyers to defend themselves
against these contrived allegations. Yet somehow, without a shred of
evidence, these same acts of ingenuity and kindness, all of which
occurred entirely in the UK, are now said to support a conspiracy
against the United States.
Something is horribly amiss in San Francisco, where the Wild West "shoot
first, ask questions later" approach to investigations — originally
deployed by HP in this case — is sadly still alive and well.
Mike Lynch is vehemently not guilty of these charges. When the true
facts are revealed, it will be apparent that the allegations are false
and recklessly maintained and that, like HP's civil claims, the
allegations serve only to underscore that this entire dispute is a
flawed theory in search of facts.
Conspicuously filed on the eve of the UK civil trial between Mike Lynch
and HP, the makeweight new charges unveiled in San Francisco today are
plainly designed to inflame and breathe life into a case plagued by
aging and unsupported allegations.
They are denied. Unequivocally.
Notably, however, these questionable new allegations, like the
underlying charges, are predicated on events that occurred predominantly
in England. While the US may seek to police the world, this commercial
dispute is about to be heard in the UK courts, where it belongs, and
Mike Lynch is looking forward to defending his good name in his home
On 29 November 2018, an indictment was filed against Mike Lynch in
the United States. In response, Dr Lynch’s lawyers, Chris Morvillo of
Clifford Chance and Reid Weingarten of Steptoe & Johnson, issued the
This indictment is a travesty of justice. Mike Lynch is a
world-leading entrepreneur who started from nothing and
spent his life building a multi-billion dollar technology business that
solved critical problems for companies and governments all around the
world. These stale allegations are meritless and we reject them
This case is unsupportable. It targets a British citizen with rehashed
allegations about a British company regarding events that occurred in
Britain a decade ago. It has no place in a US court. The claims amount
to a business dispute over the application of UK accounting standards,
which is the subject of a civil case with HP in the courts of England,
where it belongs.
There was no conspiracy at Autonomy and no fraud against HP for the DoJ
to take up. HP has a long history of failed acquisitions. Autonomy was
merely the latest successful company it destroyed. HP has sought to
blame Autonomy for its own crippling errors, and has falsely accused
Mike Lynch to cover its own tracks.
Mike Lynch will not be a scapegoat for their failures. He has done
nothing wrong and will vigorously defend the charges against him.
federal grand jury indicted Michael Richard Lynch, the former Chief
Executive Officer (“CEO”) of Autonomy Corporation plc (“Autonomy”), with
conspiracy to commit wire fraud and multiple counts of wire fraud,
announced United States Attorney Alex G. Tse and Federal Bureau of
Investigation (FBI) Special Agent in Charge John F. Bennett. Stephen
Keith Chamberlain, Autonomy’s former Vice President for Finance, was
also indicted today in the same indictment for the same offenses.
According to the indictment, Lynch, 53, and Chamberlain, 46, both
citizens and residents of the United Kingdom, allegedly engaged in a
scheme to defraud purchasers and sellers of Autonomy securities,
including the Hewlett-Packard Company, about the true performance of
Autonomy’s business, its financial condition, and its prospects for
Prior to October 2011, Autonomy was a company incorporated in the United
Kingdom that maintained dual headquarters in San Francisco and
Cambridge. In 2010, about 68% of Autonomy’s reported revenues came from
the United States and other countries in the Americas. The case involves
the acquisition by Palo Alto-based Hewlett-Packard Company and
Hewlett-Packard Vision B.V., a wholly-owned subsidiary of HP
(collectively “HP”), of Autonomy. On August 18, 2011, HP entered into an
Offer Agreement with Autonomy and publicly announced its offer to
acquire Autonomy for approximately $11 billion. On October 3, 2011, HP’s
acquisition of Autonomy closed and HP acquired control of Autonomy.
According to the Indictment, between 2009 and 2011, Lynch and
Chamberlain, and other co-conspirators, (1) artificially inflating
Autonomy’s revenues by backdating written agreements to record revenue
in prior periods; recording revenue on contracts that were subject to
side letters or other contingencies that impacted revenue recognition;
and improperly recorded revenue for reciprocal or roundtrip
transactions; (2) made false and misleading statements to Autonomy’s
independent auditor about transactions allegedly supporting the
recognition of revenue and other items in Autonomy’s financial
statements; (3) made false and misleading statements to market analysts
covering Autonomy about Autonomy’s true performance and the nature and
composition of its products, revenues and expenses; (4) made false and
misleading statements to Autonomy’s regulators in response to inquiries
about its financial statements; (5) made false and misleading statements
that Autonomy was a so-called “pure software” company while concealing
the fact that Autonomy engaged in hidden, loss-making resales of
hardware separate from its sale of appliances; (6) made false and
misleading statements about Autonomy’s alleged sales of original
manufactured equipment or “OEM” licenses; and (7) intimidated, pressured
and paid off persons who raised complaints about or openly criticized
Autonomy’s financial practices and performance.
As part of the alleged scheme to defraud, Autonomy issued materially
false and misleading quarterly and annual financial statements which the
defendants allegedly provided to HP during the time that HP was
considering whether to purchase Autonomy. The indictment alleges that
Lynch and Chamberlain caused Autonomy to make materially false and
misleading statements directly to HP regarding Autonomy’s financial
condition, performance, and business during the negotiations between HP
and Autonomy leading up to the August 18, 2011 acquisition announcement.
Allegedly, the defendants, and their co-conspirators, made false and
misleading statements about the nature of Autonomy’s products, concealed
Autonomy’s non-appliance hardware sales, and made other false and
misleading statements during HP’s “due diligence” of Autonomy.
In sum, the indictment charges Lynch and Chamberlain with one count of
conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, and
thirteen (13) counts of wire fraud, in violation of 18 U.S.C. § 1343.
The indictment also includes asset forfeiture allegations.
No federal court appearance has yet been scheduled for the defendants.
The indictment filed today merely alleges that crimes have been
committed, and the defendants are presumed innocent until proven guilty
beyond a reasonable doubt. If convicted, the defendants face a maximum
sentence of twenty (20) years in prison, and a fine of $250,000, plus
restitution, for each count of wire fraud and for the conspiracy count.
However, any sentence following conviction would be imposed by the court
after consideration of the U.S. Sentencing Guidelines and the federal
statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorneys Robert S. Leach, Adam A. Reeves, and William
Frentzen are prosecuting the case with the assistance of Beth Margen,
Phillip Villanueva, and Bridget Kilkenny. The prosecution is the result
of a multi-year investigation involving the FBI and the United States
Securities and Exchange Commission.