Mike Lynch, 59, is the founder of enterprise software firm Autonomy. He was acquitted of fraud charges in June after defending himself in a trial over allegations that he artificially inflated Autonomy’s value in an $11.7 billion sale to tech giant Hewlett Packard.
Chris Ratcliffe | Bloomberg | Getty Images
LONDON — British technology entrepreneur Mike Lynch has been found dead in the wreckage of his superyacht, which sank off the coast of Sicily earlier this week. He was 59 years old.
Just two months ago, Lynch won a stunning victory in a landmark U.S. trial over allegations from Hewlett Packard that he had artificially inflated the value of his company Autonomy when he sold it to the U.S. enterprise tech giant for $11.7 billion in 2011.
Fears for Lynch’s life swirled earlier this week when he was reported missing after the sinking of a yacht — later confirmed as owned by his wife Angela Bacares — off the coast of Porticello, a small fishing village in the province of Palermo in Italy.
Bacares was one of 15 people rescued rescued following the yacht’s collapse earlier this week.
The anchored vessel, a 56-meter (184 feet) sailing yacht named the Bayesian, was hit by a violent storm early Monday morning.
Witnesses told local media the anchored boat, which was carrying 10 crew members and 12 passengers, descended rapidly after its mast broke.
Lynch’s body was retrieved from the wreckage of the yacht Wednesday, a source familiar with the matter told CNBC Thursday. His daughter, Hannah, remains unaccounted for, according to the source, who asked not to be identified due to the sensitive nature of the situation. Sky News earlier reported the news.
‘Britain’s Bill Gates’
Born in Ilford, a large town in East London, to Irish parents in 1965, Lynch grew up near Chelmsford in the English county of Essex. His mother was a nurse and his father was a fireman.
Lynch had a modest upbringing but, at the age of 11, he was awarded a scholarship to attend Bancroft’s School, a private school in Woodford Green, East London.
Mike Lynch, founder of Autonomy, speaks at a Confederation of British Industry conference in London, U.K., in 2003.
Graham Barclay | Bloomberg | Getty Images
From Bancroft’s, he attended the University of Cambridge, where he studied natural sciences, focusing on areas including electronics, mathematics and biology.
After completing his undergraduate studies, Lynch completed a Ph.D. in signals processing and communications.
Toward the end of the 1980s, Lynch founded Lynett Systems Ltd., a firm which produced designs and audio products for the music industry.
A few years later, in the early 1990s, he founded a fingerprint recognition business called Cambridge Neurodynamics, which counted the South Yorkshire Police among its customers.
But his big break came in 1996 with Autonomy, which he co-founded with David Tabizel and Richard Gaunt as a spinoff from Cambridge Neurodynamics. The company scaled into one of Britain’s biggest tech firms.
Autonomy’s software, made up of pattern-matching algorithms, was touted as a solution that could help employees abstract meaning from unstructured data, including web pages, email, video, audio, and text.
These pattern recognition techniques were based on so-called Bayesian inference, a method of statistical inference named after a theorem developed by 18th century statistician Thomas Bayes.
Lynch’s luxury yacht, the Bayesian, was named after this mathematical model.
Autonomy founder Mike Lynch poses at the company’s then-offices near Cambridge, U.K, on Thursday, July 19, 2007.
Graham Barclay | Bloomberg | Getty Images
After the sale of his company to HP, Lynch became known by U.K. national media as “Britain’s Bill Gates,” serving as a rare example of a U.K. businessman who successfully built and scaled a globally significant tech business selling into various markets around the world.
Legal battle with HP
However, Lynch’s reputation would go on to take a hit after the deal with HP took a turn for the worse. In 2012, HP took an $8.8 billion write-down on the value of Autonomy — just a year after buying it.
This came despite pressure on the U.K. government from Lynch’s supporters not to allow his extradition.
U.S. prosecutors had filed criminal charges including wire fraud and conspiracy for an alleged scheme to inflate Autonomy’s revenue starting in 2009, partly to entice a buyer.
However, in a stunning victory in June, Lynch was acquitted of fraud charges following trial. The trial lasted three months.
Mike Lynch leaves the Rolls Building in London following the civil case over his £8.4 billion sale of his software firm Autonomy to Hewlett-Packard in 2011. Picture date: Monday March 25, 2019.
Dominic Lipinski | PA Images | Getty Images
During the course of the trial, Lynch took the stand in his own defense. He denied wrongdoing and told jurors that HP botched Autonomy’s integration.
Prosecutors had alleged Lynch, along with Autonomy’s now-deceased finance executive Stephen Chamberlain, who also died in a tragic car crash Saturday, padded Autonomy’s finances in a number of ways.
These included back-dated agreements, concealing the firm’s loss-making business by reselling hardware, and intimidating or paying off individuals who had raised concerns.
However, Lynch told jurors he had focused on tech-related matters at Autonomy, not finances.
Accounting and money decisions were left to Autonomy’s then-chief financial officer, Sushovan Hussain, he said.
Hussain was separately convicted in the U.S. in 2018 on charges of conspiracy, wire fraud and securities fraud related to the HP deal. He was released from prison in January after serving a five-year sentence.
Lynch’s influence on UK tech
Alongside founding Autonomy, Lynch also runs Invoke Capital, a venture capital firm focused on backing European tech startups. He founded Invoke in 2012.
He became a key voice supporting the U.K. technology industry, backing key names like cybersecurity firm Darktrace and legal tech firm Luminance.
Publicly listed Darktrace, which had fended off similar allegations of inflating its revenue by U.S. short seller Quintessential Capital Management, earlier this year agreed to a deal to be bought out and taken private by U.S. private equity firm Thoma Bravo for $5.32 billion in cash.
Lynch was previously on the board of U.K. broadcaster BBC, and once also served as an advisor to the U.K. government on the Council for Science and Technology.
In 2014 and 2015, he made the Forbes’ billionaires list, with an estimate net worth of $1 billion. However, while facing legal costs amid his dispute with HP, he dropped off that list in 2016.
Legal struggles aside, Lynch had several hobbies to keep him busy, including keeping and caring for cattle and pigs at his home in Suffolk.
Mike Lynch, founder of software firm Autonomy, at the company’s headquarters in, Cambridge, U.K., Aug. 24, 2000.
Bryn Colton | Hulton Archive | Getty Images
“I keep rare breeds,” Lynch told LeadersIn in a 2016 interview. “I have cows that became defunct in the 1940s and pigs that no one has kept since the medieval times and none of them have any Apple products whatsoever.”
Prior to his passing, Lynch had reportedly returned to his farm in Suffolk, a county in the east of England, to recover from his U.S. legal battle, the local East Anglian Times newspaper reported.
Just weeks before he was reported missing, Lynch told The Times newspaper of how he feared dying in prison if found guilty over the HP allegations.
“‘If this had gone the wrong way, it would have been the end of my life as I have known it in any sense,” Lynch said in the interview with The Times.
“It’s bizarre, but now you have a second life – the question is, what do you want to do with it?” he added.
Check out the companies making headlines in midday trading. FuboTV — The streaming provider soared 242% after confirming it struck a deal to combine its online live TV businesses with Walt Disney . The new venture will be 30% owned by Fubo and 70% by Disney and form the second-largest digital pay-TV provider after YouTube TV. Pony AI — The China-based self-driving vehicle company added 2% after Pony AI said in a Friday statement it was trying to launch robotaxi services in Hong Kong, the first step in its global operations expansion. Paycor — Shares of payroll services provider Paycor surged 24% after Bloomberg reported that the company is in advanced talks to be acquired by larger competitor Paychex . Sources familiar with the matter said that a deal may be announced as early as this week. T-Mobile — The telecom stock fell 4% after a downgrade to equal weight from overweight at Wells Fargo. The investment firm said T-Mobile’s growth in key metrics is slowing at a time when the company is trading at a pricey premium to its major competitors, increasing the risk for the stock. Dutch Bros — Shares rose 2% after the coffee chain received an upgrade to outperform from neutral at Baird. The investment firm said it had “become more confident in the near-term fundamental setup” as the new year began, and still expects plenty of upside ahead for the stock. Capri Holdings — Shares of the Coach and Michael Kors parent popped more than 6%. The gains came as BMO upgraded shares to outperform from a market perform rating, citing “too-negative/uninterested sentiment.” VeriSign — The internet stock jumped nearly 3% after a regulatory filing revealed Warren Buffett ‘s Berkshire Hathaway scooped up 20,044 more shares for $4.1 million via transactions on Tuesday, Thursday and Friday. The conglomerate has now bought shares of VeriSign for 12 sessions in a row. American Airlines — The carrier stock popped 5% following TD Cowen’s upgrade to buy from hold. The firm also set a price target of $25 for shares, which marks a new high on Wall Street, per LSEG. Citigroup — The bank stock rose 4% following an upgrade to overweight from equal weight at Barclays, which cited an improved outlook for large-cap banks. The firm also said Citi may be at a turning point after reporting annual revenue growth and positive operating leverage for its businesses. Chip stocks – Chipmakers moved higher on Monday after contract electronics giant Foxconn recorded its highest-ever revenue for the fourth quarter . Shares of Taiwan Semiconductor and Nvidia each gained more than 5%, and Micron Technology surged more than 12%. Meanwhile, Advanced Micro Devices and Qualcomm likewise jumped more than 4%. MicroStrategy — The bitcoin proxy gained nearly 5% after announcing it was targeting a capital raise of up to $2 billion of preferred stock , to be used to acquire more bitcoin and strengthen MicroStrategy’s balance sheet. Plug Power — The developer of hydrogen fuel cell systems gained 19%. It had previously added 13% on Friday after the U.S. Department of the Treasury released final rules for billions in tax credits for companies involved in making hydrogen in an effort to grow the clean energy industry. Chewy — Shares rose about 4% after Mizuho upgraded the online pet food retailer to outperform from neutral, and hiked its price target to $42 from $24, implying about 17% upside from Friday’s close. Analyst David Bellinger said the “near-term concerns around higher ad spend are short-sighted.” — CNBC’s Sean Conlon, Michelle Fox, Alex Harring, Yun Li, Sarah Min, Jesse Pound and Samantha Subin contributed reporting.
The Federal Reserve’s top banking regulator will be stepping down next month, paving the way for President-elect Donald Trump to name a replacement and heading off a potential confrontation between the two.
Michael Barr’s resignation from the position, which is formally called the vice chair for supervision, takes effect as of Feb. 28, though he will stay on as a governor on the Fed board. His term as Fed governor lasts until 2026.
There had been speculation that Trump might seek to replace Barr after he takes office Jan. 20, the announcement will ease that transition amid speculation that the new president wants someone who is more bank-friendly to take the role.
Though he did not specifically mention the rumors that Trump would attempt to remove him, Barr said in a statement that “the risk of a dispute over the position could be a distraction from our mission. In the current environment, I’ve determined that I would be more effective in serving the American people from my role as governor.”
“It has been an honor and a privilege to serve as the Federal Reserve Board’s vice chair for supervision, and to work with colleagues to help maintain the stability and strength of the U.S. financial system so that it can meet the needs of American families and businesses,” he said.
Bank stocks rallied following the announcement. The SPDR S&P Bank exchange-traded fund that tracks the industry’s leaders gained more than 1%.
CNBC.com has reached out to the Trump transition team for comment.
In a release announcing the decision, the Fed noted that it will not make any major decisions on rules and regulations until a successor is named. The bank has been revising a set of new rules, dubbed the Basel endgame, that has been broadly unpopular in the industry.
Because the Fed is limited to seven board members, Trump will have to name someone from current group to the new position.
The position was created following the 2008 financial crisis that saw the implosion of multiple big names on Wall Street. Under Barr’s watch, the industry saw a crisis in early 2023 in which Silicon Valley Bank and a few other names collapsed, forcing the Fed to implement a liquidity facility to keep the issues from spreading.
In recent days, speculation had swelled that Trump might seek to force Barr from office. A Reuters report in late December indicated that Barr was consulting with a law firm over his legal options should the president-elect make a move.
Check out the companies making headlines before the bell. American Airlines – Shares gained more than 4% after TD Cowen upgraded the airline to a buy from a hold rating and lifted its price target to a Wall Street high. The new target implies roughly 47% upside from Friday’s close. FuboTV – The streaming provider rose more than 165% after the company confirmed it struck a deal to combine its online live TV businesses with Walt Disney . The new venture, which will include Disney’s Hulu + Live TV business, will be 30% owned by Fubo and 70% by Disney and form the second-largest digital pay-TV provider after YouTube TV. Boeing – The aircraft stock added about 2% before the opening bell after an upgrade to overweight at Barclays. Analyst David Strauss said a tough 2024 for Boeing stock could give way for a rebound in the new year on strong deliveries and production. Citigroup – The stock added 2% on the back of an upgrade at Barclays to overweight from equal weight . The firm cited an improved outlook for large-cap banks and believes Citi may be at a turning point after posting annual revenue growth and positive operating leverage for its businesses. Chip stocks – Shares of chip stocks rose on Monday following contract electronics giant Foxconn’s record revenue for the fourth quarter . Shares of Taiwan Semiconductor and Micron Technology each gained more than 5%, while Nvidia and Advanced Micro Devices advanced almost 3%. Broadcom , another U.S. chipmaker, moved more than 1% higher. Xpeng – U.S.-listed shares of the Chinese electric vehicle maker rose more than 4% after the firm announced that it’s planning to expand its partnership with Volkswagen in China, with both companies opening their super-fast charging networks in the country to the other’s customers. European shares of Volkswagen rose more than 5% following the announcement. MicroStrategy – Shares jumped about 4% on the heels of the bitcoin proxy announcing that it was targeting a capital raise of up to $2 billion of preferred stock . MicroStrategy said the target was to further strengthen its balance sheet and acquire more bitcoin. Microsoft – Shares rose around 1% after Bernstein lifted its price target by $5 to $516. Bernstein said concerns around converting capital expenditures to revenue that have pushed away investors should subside shortly. Plug Power – The developer of hydrogen fuel cell systems rose about 6% in Monday’s premarket trading, adding on to its Friday rally of 13%. These moves come after the U.S. Department of the Treasury released final rules for billions in tax credits for companies involved in making hydrogen in an effort to grow the clean energy industry. Chewy – The e-commerce stock rose more than 4% after an upgrade to outperform from neutral at Mizuho. The investment firm said Chewy’s recent increase in advertising is “opportunistic” and not a sign that pet-related spending is on the decline. Auto stocks – Shares of automakers gained after the Washington Post, citing three people familiar with the matter, reported that aides to President-elect Donald Trump are discussing only imposing tariffs on certain sectors considered critical to national or economic security rather than on all imports. Lucid Group and Ford Motor shares jumped 3% and 2%, respectively, while shares of Tesla moved more than 2% higher. — CNBC’s Lisa Kailai Han, Alex Harring, Samantha Subin, Jesse Pound, Brian Evans and Michelle Fox contributed reporting.
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