Mike Lynch, the co-founder of British tech giant Autonomy and security firm Darktrace, has gone missing after his family yacht sank off the coast of Sicily.
Lynch had several weeks ago been acquitted of fraud in a long-running case centered on HP’s 2011 acquisition of Autonomy, after spending a year under house arrest in the US.
In a bizarre twist of fate, his co-defendant in that case was killed in Cambridgeshire after a car hit him while jogging on Saturday.
The 56-meter sailboat, called the Bayesian, was owned by Lynch’s wife, Angela Bacares. It had been anchored off the Sicilian coast near Porticello when a storm struck early on Monday morning. Reports suggest the boat was hit by a waterspout.
The yacht had been carrying 22 people, of which 10 were crew and 12 were passengers, including Lynch, his wife, and his daughter. Reports suggest the other passengers were colleagues who had worked for Lynch.
At the time of writing, Bacares had been rescued from the troubled yacht alongside 14 other people. One body has been recovered, and six people remain missing, including Lynch and his teenaged daughter, as well as Morgan Stanley International bank chairman Jonathan Bloomer and Clifford Chance lawyer Chris Morvillo.
Divers are continuing the search of the wreck 50 meters below the surface.
Who is Mike Lynch?
In 1996, Lynch founded unstructured search firm Autonomy alongside David Tabizel and Richard Gaunt, taking on the role of CEO. In 2011, HP acquired Autonomy for $11 billion, at the time, the biggest purchase of a UK tech firm. Lynch is believed to have made $800 million from the sale — but it sparked a spate of legal troubles.
A year later, HP wrote off $8.8 billion of the value of Autonomy, saying its value was overblown intentionally, calling for an investigation of “serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy.”
Lynch has always denied the allegations, pointing out at the time that HP had 300 people for due diligence: “It would be kind of a big elephant to have missed.”
The UK Serious Fraud Office initially investigated, deciding in 2015 it lacked evidence and handed the case to US authorities. In 2018, Sushovan Hussain, Autonomy’s finance chief officer, was sentenced to five years in prison for fraud. Shortly after, Lynch and Chamberlain were both indicted on fraud charges in the US.
HP also brought a civil case in the UK; Lynch countersued. In 2022, the UK High Court ruled that Autonomy was liable for some of HPs losses, marking a win for the company.
Final damages had yet to be decided, though HP had lowered its civil action claims to $4bn, and Lynch had intended to appeal the ruling.
On the same day as the UK High Court ruling, and after years of debate over extradition rules, Lynch was finally approved for extradition to the US to face criminal fraud charges. Lynch travelled to the US in May 2023 and spent a year under house arrest.
In March of this year, the case finally came to trial — 13 years after the sale. Lynch faced 16 counts of fraud and conspiracy with a threat of decades in prison; Chamberlain faced 15 counts. After weeks of evidence, Lynch and Chamberlain were found not guilty.
His legal team argued Lynch simply didn’t know of any misdoings at the company, instead focusing on the technology side.
Lynch said at the time: “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.
A serial entrepreneur
Autonomy wasn’t Lynch’s only tech success. Two years after the sale to HP, Lynch’s investment firm Invoke Capital backed the founding of security firm Darktrace, which was started with staff from Autonomy and Invoke, and uses AI to hunt down security threats inside corporate networks.
Lynch’s Autonomy troubles followed him to the security firm. In 2021, UBS pulled out of a Darktrace IPO over ties to Lynch.
Darktrace investors last year rejected a board appointment for a Lynch representative ahead of the US fraud trial, and announced this year that Invoke’s stake had fallen below that which guaranteed a board seat.
Private equity firm Thoma Bravo in April offered $5bn to acquire Darktrace. Reuters said Darktrace stock has underperformed because of the allegations around Lynch.
-
-
-
-
-
-
-
-
