British businessman Mike Lynch took the stand Thursday in federal court in San Francisco as a key witness in his own criminal fraud trial, defending his role in Autonomy, the technology company he co-founded and later sold.
The trial continued as planned Thursday despite the defense team requesting a mistrial over alleged improper cross-examination of a witness by the prosecution. Lynch’s defense team called the questioning, which indirectly referenced the tech titan’s extradition, “egregious” and “highly inappropriate” in a filing.
U.S. District Judge Charles Breyer denied the motion to dismiss, but acknowledged that the prosecution’s questions were inappropriate and ordered the jury to exclude subsequent questions and testimony from their deliberation.
US authorities have charged Lynch with 16 counts of wire fraud, securities fraud and conspiracy in connection with his company’s 2011 acquisition deal with Hewlett-Packard, alleging He artificially inflated Autonomy’s sales, misleading auditors, analysts and regulators. If he is convicted, Lynch faces up to 25 years in prison. He has pleaded not guilty.
In his testimony, Lynch said his job involved delegating many tasks to employees and that his experience founding the company was more technical in nature than business-focused.
While the government has described Lynch’s businesses as clearly fraudulent, Lynch in his testimony Thursday sought to highlight greater complexity, stating that, like any business, Autonomy “wasn’t perfect.”
“The reality of life is that it is nuanced and confusing,” he said. “(In this test) we look through the door and see how the sausage is made. One thing to keep in mind is that if you take the microscope to a spotless kitchen, you will always find bacteria. And I don’t think autonomy is any different.”
The Autonomy co-founder described the trial experience so far as “surreal,” saying he has seen “a parade of witnesses (he) never met” describing decisions in which he had no part. Prosecutors have called more than 30 witnesses since the trial began in March.
Lynch addressed the jury directly during his questioning, explaining central concepts of the case, including earnings reports, hardware sales, and the timeline of Autonomy’s founding and ill-fated acquisition. He also paused to explain Britishisms to the American jury, including phrases like “bean counters” and “nice guy.”
Much of Thursday’s questioning sought to address the government’s focus on Autonomy’s business in selling hardware. Prosecutors claim that although the company had presented itself as a software company, it relied heavily on hardware sales, something Lynch “did everything he could” to hide from the market.
Lynch said Autonomy often sold hardware and software together as a package, and that hardware sales were an important means of mitigating business risks, including changing supplier relationships.
The court adjourned Thursday afternoon before the defense finished questioning, which will resume Tuesday after a U.S. holiday. Lynch is the last witness the defense will call to the stand, meaning the trial will conclude in the coming weeks.
