Thursday , 8 December 2016
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CFO of Former HP Company Autonomy Indicted on Fraud Charges

Hewlett Packard complained bitterly that it had been deceived in its disastrous $11 billion acquisition of enterprise software firm Autonomy in 2011. This week, federal prosecutors echoed that claim, indicting Autonomy’s former chief financial officer on felony fraud charges.

The indictment charges that Sushovan Hussain, “together with others, engaged in a fraudulent scheme to deceive purchasers and sellers of Autonomy securities and HP about the true performance of Autonomy’s business, its financial condition, and its prospects for growth.”

The charges highlight a painful chapter for HP, which had hoped the Autonomy purchase would help transform the company as it struggled with faltering computer gear sales. Instead, it became an embarrassing debacle that spawned multiple lawsuits and a massive settlement with disgruntled shareholders.

After buying the British company, HP was immediately criticized by analysts for paying too much. A year later, HP announced it had written down $8.8 billion of value in Autonomy, more than $5 billion of that because of alleged accounting improprieties and misrepresentation of finances by Autonomy. Last year, HP reached a $100 million settlement in a class-action lawsuit by shareholders claiming investors were harmed by HP’s pre-purchase hype of the acquisition.

On Thursday, federal prosecutors indicted Hussain in U.S. District Court in San Francisco. He was charged with wire fraud and conspiracy to commit wire fraud. Wire fraud is financial fraud involving use of telecommunications or information technology.

The charges carry a combined maximum prison sentence of 20 years. The federal government is seeking at least $7.7 million from Hussain, money it said was gained through crime.

Hussain’s lawyer said his client was innocent and would be acquitted at trial.

“He defrauded no one and, as Autonomy’s CFO, acted at all times with the highest standards of honesty, integrity and competence,” John Keker said in a statement. “It is a shame that the Department…

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