Extract from article in Legal IT Insider
In a massive fall from grace for a man once crowned finance director of the year, Autonomy’s former chief financial officer and ex-Darktrace director Sushovan Hussain has been found guilty of fraud by a San Francisco court.
As part of a long-running criminal court battle that will shortly be replicated East of the Atlantic in the London civil courts, Hewlett Packard alleged that, prior to its $11bn acquisition of Autonomy in 2011 – part of its concerted effort to move into the software industry – senior Autonomy managers inflated the company’s financial position.
Meg Whitman, HP’s former chief executive officer, claimed that Autonomy’s management had created false transactions to overstate the company’s performance, and in 2012 HP wrote off $5bn, blaming serious accounting irregularities.
A 12-member federal jury this week agreed, convicting Hussain of 16 counts of wire and securities fraud. The verdict precedes a $5.1bn civil suit brought by HP in the UK against Hussain and Autonomy’s founder and former CEO Mike Lynch, scheduled to begin next year. Lynch is counter-suing for $160m, claiming lost investment opportunities due to reputational damage. He has strongly rejected HP’s claims that management misled HP over the company’s value.
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