Weeks before Sicily yacht disaster Mike Lynch was acquitted in US fraud case

Mike Lynch, a British tech tycoon embroiled in legal battles for over a decade until just months ago, is presumed dead after boarding a superyacht that capsized off the Sicilian coast.

The 184-foot vessel sank early Monday morning due to a violent storm off the coast of Palermo. Crews rescued 15 people in the immediate aftermath, but Lynch was nowhere to be found. The Italian Coast Guard said several people, including Lynch have been presumed dead as of Tuesday afternoon, the Wall Street Journal reports.

This includes Morgan Stanley International Chairman Jonathan Bloomer and lawyer Chris Morvillo. Lynch’s daughter, Bloomer’s wife and Morvillo’s wife were also missing and now presumed dead, according to the Journal.

The tragedy struck just two months after Lynch was acquitted in a major US fraud trial over his tech company Autonomy. One of his fellow executives, Stephen Chamberlain, died on Saturday morning after being struck by a car while jogging.

Here’s everything we know about Lynch’s legal troubles leading up to Monday’s tragic accident:

Early investigation

The Lynch saga goes back to 1996 when the Cambridge graduate founded the technology company Autonomy. Lynch built out the company for over a decade before selling it to Hewlett-Packard in 2011 for $11 billion.

A year later, HP claimed they discovered “serious accounting improprieties” by Autonomy and took an $8.8 billion write-down, wiping out their profits for that quarter,The Guardian reported at the time.

Lynch denied any wrongdoing at the time, instead blaming HP for the error, Reuters reports.

HP, claiming to have been misled about the company’s value, asked the UK’s Serious Fraud Office to investigate the case in early 2013. After two years, the office determined there wasn’t enough evidence for Lynch to be convicted.

“As we have always said, HP’s allegations are false, and we are pleased that after a two-year review of the material presented by HP, the SFO has concluded that there is not a case to pursue,” Lynch said at the time, according to the BBC.

“Let’s remember, HP made allegations of a $5bn fraud, and presented the case in public as a slam dunk,” he continued. “HP now faces serious questions of its own about its conduct in this case and the false statements it has made.”

The office then handed over the investigation to US authorities.

US indictment, executive convicted

In 2018, Autonomy Chief Financial Officer Sushovan Hussain was found guilty of several fraud charges. A federal judge later sentenced him to five years in prison.

Prosecutors said he “falsely inflated Autonomy’s revenues to make it appear Autonomy was growing when it really was not” between 2009 and 2011.

That same year, US prosecutors criminally charged Lynch and Chamberlain, former vice president of finance for Autonomy, with fraud.

Officials claimed Lynch fraudulently earned $815 million. They also accused Lynch and Chamberlain of inflating Autonomy’s revenues while lying to regulators and analysts, the BBC reported.

Lynch’s attorney disputed the charges, calling them a “travesty of justice” and accusing HP of scapegoating his client, according to the BBC.

The next step for US authorities was to seek Lynch’s extradition from the UK.

London civil case

As US officials sought extradition, HP brought a civil case against Lynch and other Autonomy executives in London’s High Court, seeking $5 billion in damages. The 2019 case was considered the UK’s biggest civil fraud trial, the BBC reported.

In the case, HP claimed Lynch and Hussain “artificially inflated Autonomy’s reported revenues, revenue growth and gross margins.”

HP won the case, but the judge said their damages would likely be far less than the $5 billion requested. Lynch’s attorneys called the ruling “disappointing” and vowed to appeal at the time, the BBC reported.

The company still has not received any damages, even after reducing its claim to $4 billion in February of this year.

Lynch extradited, acquitted in US case

After several years of back-and-forth and appeals from Lynch, he was extradited to the US in May 2023. There, he was placed under house arrest in San Francisco, California.

As he had previously argued, Lynch told the court that the dip in Autonomy’s worth was due to HP’s mismanagement of the company after buying it.

Lynch’s attorney, Reid Weingarten, said prosecutors were approaching the case as if it’s black and white.

“And you know what? You’re going to see in this trial that ain’t the way the world works,” Weingarten told the court. “The world works in grey. The world is complicated.”

Meanwhile, prosecutors argued that HP’s management of Autonomy was irrelevant and that Lynch had orchestrated a major fraud scheme over several years, according to The Guardian. Lynch faced two decades in prison if found guilty

Ultimately, a jury acquitted Lynch of all charges in June of this year.

“I am looking forward to returning to the UK and getting back to what I love most: my family and innovating in my field,” he said at the time.