Beginning Next Week: InsideCounsel will become part of Corporate Counsel. Bringing these two industry-leading websites together will now give you comprehensive coverage of the full spectrum of issues affecting today's General Counsel at companies of all sizes. You will continue to receive expert analysis on key issues including corporate litigation, labor developments, tech initiatives and intellectual property, as well as Women, Influence & Power in Law (WIPL) professional development content. Plus we'll be serving all ALM legal publications from one interconnected platform, powered by, giving you easy access to additional relevant content from other InsideCounsel sister publications.

To prevent a disruption in service, you will be automatically redirected to the new site next week. Thank you for being a valued InsideCounsel reader!


HP takes $8.8 billion hit, blames Autonomy

HP says misrepresentations by Autonomy in its purchase deal led to multibillion-dollar charge

It looks like a deal gone horribly wrong. Today, Hewlett-Packard Co. (HP) announced it will be taking an $8.8 billion charge as a result of fraudulent activity and misrepresentations made by Autonomy, a software company HP acquired last year for $11.1 billion.

“HP is extremely disappointed to find that some former members of Autonomy’s management team used accounting improprieties, misrepresentations and disclosure failures to inflate the underlying financial metrics of the company, prior to Autonomy’s acquisition by HP,” the company said in a statement today. “These efforts appear to have been a willful effort to mislead investors and potential buyers, and severely impacted HP management’s ability to fairly value Autonomy at the time of the deal.”

Autonomy is the U.K.’s second largest software maker. According to a report by Treasury & Risk, HP acquired the company with the goal to expand in cloud-computing and add software that searches a broad range of data, including email, music, videos and posts on social networks.

HP said today that it became aware of the potential misrepresentations when one of Autonomy’s senior executives came forward following Autonomy founder Mike Lynch’s departure. The executive alleged “that there had been a series of questionable accounting and business practices at Autonomy prior to the acquisition by HP,” HP said. “This individual provided numerous details about which HP previously had no knowledge or visibility.”

HP immediately launched an investigation, which is still ongoing. However, the company has already uncovered several examples of accounting improprieties and misrepresentations.

HP has referred the matter to the U.S. Securities and Exchange Commission’s Enforcement Division and the U.K.’s Serious Fraud Office for civil and criminal investigation. Autonomy’s founder and former CEO, Lynch, denies any wrongdoing.




Cathleen Flahardy

Bio and more articles

Join the Conversation

Advertisement. Closing in 15 seconds.