Mike Lynch (businessman)

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Mike Lynch

OBE DL FRS FREng
Dr Michael Lynch OBE FREng FRS.jpg
Mike Lynch in 2014, portrait via the Royal Society
Born (1965-06-16) 16 June 1965 (age 58) [1]
Ilford, Essex
Alma mater University of Cambridge (MA, PhD)
Known for Autonomy Corporation
Awards
Scientific career
Fields Software engineering
Thesis Adaptive techniques in signal processing and connectionist models  (1990)
Doctoral advisor Peter J.W. Rayner

Michael Richard Lynch OBE DL FRS FREng (born 16 June 1965) [1] is a British technology entrepreneur, known as the co-founder of Autonomy Corporation and the founder of Invoke Capital. Lynch additionally became a co-founder, alongside Invoke Capital, of cybersecurity company Darktrace. He has also had various other roles, including those in an advisory capacity.

Contents

Following a degree, PhD and post-doctoral research at Cambridge University, he applied his research in machine learning to set up software companies and become a major figure in Silicon Fen. The sale of Autonomy to Hewlett-Packard in 2011 led to accusations of fraud and resulted in civil litigation in the UK and Lynch's extradition to the US, where he went on trial in March 2024.

Early life and education

Lynch was born in Ilford in 1965 and grew up near Chelmsford in Essex. His mother was a nurse from County Tipperary and his father a firefighter from County Cork in Ireland. [2]

Aged 11, he won a scholarship to Bancroft's School, Woodford. [3] From there he went to Christ's College, Cambridge to study Natural Sciences. After graduating he went on study for a PhD in neural networks (a form of machine learning) under the supervision of Peter Rayner, director of studies in engineering at Christ's College, and produced a thesis with the title Adaptive techniques in signal processing and connectionist models. [4] [5] [6] [7] He then undertook a research fellowship in adaptive pattern recognition. [8]

Career

Lynch set up his first company in the late 1980s, while he was studying for his PhD. Lynett Systems Ltd was financed with a £2000 loan negotiated in a bar and produced designs and audio products for the music industry, including electronic synthesizers and a sampler for the Atari ST. [4] [9] In 1991 he founded Cambridge Neurodynamics, which specialized in computer-based fingerprint recognition. [4] There were three spin-offs from Cambridge Neurodynamics: Neurascript, which searched business documents based on character recognition and was bought by German Company Dicom in 2004; NCorp, which searched databases; and Autonomy which searched unstructured sources including phone calls, emails and videos. [10] [11]

Autonomy was founded in 1996 by Lynch, David Tabizel and Richard Gaunt. [4] With Lynch as chief executive office (CEO), the search software company grew to become one of the UK's top 100 public companies, and a leading company in Silicon Fen. [11] [3] In October 2011 Autonomy was sold to Hewlett-Packard for more than $11 billion (£8.6 billion). [11] The sale would eventually lead to civil and criminal cases against Lynch and Autonomy's chief financial officer (CFO) Sushovan Hussain. [11]

After the sale of Autonomy, Lynch founded a venture capital firm, Invoke Capital. [3] One of the first companies backed by Invoke Capital was cybersecurity firm Darktrace. [4] Invoke Capital became the firm's biggest shareholder, with Lynch and his wife Angela Bacares being the second biggest, holding shares worth nearly £200 million. Many of the staff at Darktrace, including its CEO, had moved across from Autonomy and Lynch was a member of the board until 2018 and continued as a member of the advisory council until 2021, and a member its science and technology council until February 2023. As well as having to deal with questions about Lynch's involvement with the company, Darktrace has also had to counter scepticism about its technology which analysts had referred to as "snake oil". [3] [12] Other technologies backed by Invoke Capital include: Featurespace, which specialises in software to detect and prevant fraud and financial crime; [13] legal technology firm Luminance, established in collaboration with Slaughter and May; [14] and Sophia Genetics, a Swiss medical data company. [15]

As a leading technology entrepreneur, Lynch held a number of positions on boards and committees. When he was charged with fraud in the United States he resigned from his role as a government advisor on the Council for Science and Technology and from Royal Society committees. He had previously been on the board of Cambridge Enterprise, Kew Gardens, the BBC and the British Library, Nesta and the Francis Crick Institute. [16] [17]

Awards and honours

Lynch was awarded an OBE for services to enterprise in the 2006 New Year Honours. [3]

In June 2008, he was elected a Fellow of the Royal Academy of Engineering. [18]

In 2011, he was named as the most influential person in UK IT by Computer Weekly. [19]

In 2014, he was elected a Fellow of the Royal Society. [20]

In 2014 he was made a Deputy Lieutenant of the County of Suffolk. [21]

Civil and criminal cases

Lynch made an estimated $800 million from the 2011 sale of Autonomy to Hewlett-Packard, but the sale would prove problematical and leave him facing civil claims and criminal charges. [22]

In November 2012, Hewlett-Packard announced a $8.8 billion (£5.5 billion) writedown of assets following their purchase of Autonomy due to "serious accounting improprieties, disclosure failures and outright misrepresentations" which occurred before the acquisition and artificially inflated the value of Autonomy. Lynch denied the allegations. [23] The allegations were investigated by the UK Serious Fraud Office, who announced in January 2015 that it was ending its investigation with no action due to insufficient evidence in respect of some aspects of the allegations, while other aspects were ceded to the US authorities. [24] In November 2018, Lynch was indicted for fraud in the US along with Stephen Chamberlain, former vice president of finance at Autonomy. Earlier in 2018 Sushovan Hussain, Autonomy's former finance chief officer, had been found guilty of fraud in the US and sentenced to five years in prison. [25] [26]

The civil case was heard at the Rolls Building Rolls Building, Royal Courts of Justice.jpg
The civil case was heard at the Rolls Building

In March 2019, Hewlett-Packard brought a civil action for fraud in the High Court in London. The action alleged that Autonomy CFO Sushovan Hussain and founder Lynch "artificially inflated Autonomy's reported revenues, revenue growth and gross margins". The case was heard by Justice Hildyard sitting for 93 days over a period of nine months at the Rolls Building. [26] [27] [28] The judge delivered his conclusions in January 2022, ruling that Hewlett-Packard had substantially succeeded in their claims. Damages were to be decided later, but the judge said they were likely to be considerably less than the $5 billion claimed by Hewlett Packard. [26] [28]

While the civil trial was taking place in London, the American authorities were seeking Lynch's extradition to face criminal charges of conspiracy and fraud in the US. Through his lawyers, Lynch said he "vigorously rejects all the allegations". As a formality, he submitted himself for arrest in February 2020, and was released on bail of £10 million by Westminster Magistrates' Court. [29] The case created a debate about the workings of UK–US extradition treaty of 2003, with five former cabinet ministers signing a letter to The Times arguing against the extradition and MP David Davis said in parliament that it was an attempt to by the American authorities to "exercise extraterritorial jurisdiction". [30] [31]

In July 2021 a district judge ruled at Westminster Magistrates' Court that Lynch could be extradited to the US. [32] Lynch applied for a judicial review; the application was rejected by High Court Justice Swift in January 2022 and Home secretary Priti Patel approved his extradition. [33] [28] During the extradition proceedings Lynch was represented by Alex Bailin KC, who argued that Lynch should face trial in the UK. [30] After a further appeal failed, Lynch was flown to the US in May 2023, and held under house arrest in San Francisco to await trial. [34]

Lynch, together with Chamberlain, went on trial in San Francisco on 18 March 2024. Lynch was charged with 16 counts of wire fraud, securities fraud and conspiracy, while Chamberlain faced 15 counts of wire fraud and conspiracy. Both defendants pleaded not guilty. [35]

Personal life

Lynch is married and has two daughters. [3] His entry in Who's Who lists his recreations as jazz saxophone and preserving rare breeds. [1] He has a herd of Red Poll cattle on his Loudham Hall estate at Pettistree in East Suffolk. [36] He also breeds Koi carp. [23]

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References

  1. 1 2 3 "Lynch, Michael Richard" . Who's Who . Vol. 2015 (online edition via Oxford University Press  ed.). A & C Black.(Subscription or UK public library membership required.)
  2. ↑ "Dr Michael Lynch trial to go ahead in California in March". The Irish Post. 22 February 2024.
  3. 1 2 3 4 5 6 "Mike Lynch: the rise and fall of the extradited tech tycoon". The Guardian. 12 May 2024.
  4. 1 2 3 4 5 Shead, Sam; Ghosh, Shona (26 December 2018). "Inside the life of Mike Lynch, who sold his search startup to HP for $11 billion and was charged with fraud". Insider.
  5. ↑ "The Quest for Meaning". Wired . February 2000. Archived from the original on 13 May 2012. Retrieved 10 March 2017.
  6. ↑ "Rayner, Prof. Peter John Wynn" . Who's Who . Vol. 2015 (online edition via Oxford University Press  ed.). A & C Black.(Subscription or UK public library membership required.)
  7. ↑ "This is the thinking computer's man". Independent. 22 November 1999.
  8. ↑ "Profile:Mike Lynch". 19 August 2011.
  9. ↑ "The Searcher". Forbes. 3 April 2000.
  10. ↑ Connell, David; Probert, Jocelyn (January 2010). "Exploding the Myths of UK Innovation Policy" (PDF). Judge Business School.
  11. 1 2 3 4 "Mike Lynch: Autonomy founder's fraud trial begins in US". BBC News. 19 March 2024.
  12. ↑ "'Snake oil': doubts loom over tech firm Darktrace's high-octane sales strategy". The Guardian. 25 January 2022.
  13. ↑ "Lynch backs software company that seeks to predict behaviour". Financial Times. 10 June 2014.
  14. ↑ "Mike Lynch Steps Down From Luminance Board To Fight US Extradition". Artificial Lawyer. 5 February 2022.
  15. ↑ "Autonomy boss Mike Lynch invests in Swiss DNA analysis start-up". The Standard. 8 July 2014.
  16. ↑ "Mike Lynch steps down as government adviser following criminal charges". Financial Times. 30 November 2018.
  17. ↑ "Dr Mike Lynch". Huffington Post.
  18. ↑ "List of Fellows". Archived from the original on 8 June 2016. Retrieved 21 October 2014.
  19. ↑ "UKtech50: Meet Mike Lynch, the most influential person in UK IT". Computer Weekly. 8 December 2011.
  20. ↑ "Dr Michael Lynch OBE FREng FRS". Archived from the original on 2 May 2014.
  21. ↑ "Deputy Lieutenants of the County of Suffolk". Archived from the original on 30 March 2014.
  22. ↑ "Extradited Autonomy founder Mike Lynch sues SFO over data request". The Guardian. 31 January 2024.
  23. 1 2 "Hewlett-Packard blames Autonomy 'improprieties' for $8.8bn writedown". 20 November 2012.
  24. ↑ "Autonomy HP sale investigation by Serious Fraud Office closes". BBC. 19 January 2015. Archived from the original on 22 January 2015. Retrieved 10 February 2015.
  25. ↑ "Ex-Autonomy boss Mike Lynch charged with fraud in the US". BBC. 30 November 2018.
  26. 1 2 3 "HP wins multibillion-dollar fraud case over Autonomy sale". BBC. 28 January 2022. Archived from the original on 28 January 2022.
  27. ↑ "Rolls judge warns US over epic trial". The Law Society Gazette. 8 July 2019.
  28. 1 2 3 "Tech entrepreneur Mike Lynch can be extradited to US, rules Priti Patel". The Guardian. 28 January 2022.
  29. ↑ "UK tech giant founder arrested over US extradition". BBC. 5 February 2020. Archived from the original on 5 February 2020. Retrieved 6 February 2020.
  30. 1 2 "Autonomy co-founder's lawyers attack 'overweening' US extradition effort". The Guardian. 9 February 2021.
  31. ↑ "One-time Brexit Secretary David Davis demands Mike Lynch's extradition to US be halted". The Register. 23 January 2020.
  32. ↑ "British businessman Mike Lynch faces extradition to US". The Guardian. 22 July 2021.
  33. ↑ "Software billionaire loses bid to delay decision on US extradition". The Law Society Gazette. 26 January 2022.
  34. ↑ "Autonomy founder Mike Lynch extradited to US after losing appeal". The Guardian. 12 May 2023.
  35. ↑ "What have we learned from week one of Mike Lynch's US fraud trial?". The Guardian. 23 March 2024.
  36. ↑ "Red Poll Newsletter No. 109, Winter 2017" (PDF). Red Poll Cattle Society. 2017.
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