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!


U.K. regulators probe Autonomy’s finances

Financial Reporting Council looks at finances leading up to merger with HP

U.K. regulators are stepping in to have a look into Hewlett-Packard Co.’s accusations of accounting fraud against Autonomy.

HP announced in November 2012 that it would be taking a multibillion-dollar charge over unexpected losses related to its purchase of Autonomy in 2011. HP claimed Autonomy misrepresented itself during deal discussions and as a result, Autonomy failed to deliver the growth HP expected.

Now, the U.K.’s Financial Reporting Council (FRC) is getting involved, probing into Autonomy’s published accounting records between January 2009 and June 2011, the years and months leading up to HP’s acquisition of the company.

HP claims Autonomy bulked up hardware sales to appear more profitable and used transactions with its software resellers to increase revenue recognition or fabricated sales. HP said it learned of Autonomy’s fraudulent activity through the help of a whistleblower.

Autonomy has come out in defense of these allegations. "We continue to reject these allegations in the strongest possible terms. Autonomy's financial accounts were properly maintained in accordance with applicable regulations, fully audited by Deloitte and available to HP during the due diligence process," Autonomy founder Mike Lynch said in a January statement.

Lynch said today that he looks forward to the FRC’s findings.

Read more about this investigation on Bloomberg.

For more InsideCounsel stories about this case, see:

Autonomy founder Mike Lynch defends company’s books

HP sued over Autonomy-deal accounting fiasco

WSJ Law Blog: Are lawyers to blame for the HP-Autonomy mess?

HP takes $8.8 billion hit, blames Autonomy


Cathleen Flahardy

Bio and more articles

Join the Conversation

Advertisement. Closing in 15 seconds.