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 was acquitted of fraud charges in June in a landmark trial over allegations made by Hewlett Packard that he had artificially inflated the value of his company when he sold it to the U.S. enterprise tech giant for $11.7 billion in 2011.
Just two months after his acquittal, Lynch — who was once lauded by the U.K. national press as “Britain’s Bill Gates” — was reported missing Monday after the sinking of a superyacht off the coast of Sicily.
The yacht, called the Bayesian, capsized at around 4 a.m. local time while anchored off the coast of Porticello, a small fishing village located in the province of Palermo in Italy. It was struck by an unexpectedly violent storm, according to local media reports.
Lynch’s wife, Angela Bacares, is among the 15 people who were rescued after the yacht’s collapse. At least one man has died, while six people — including Lynch’s daughter Hannah — remain unaccounted for, officials have said.
Sicily’s civil protection agency told reporters late Monday that Morgan Stanley International chairman, Jonathan Bloomer, his wife Judy, and Clifford Chance lawyer Chris Morvillo are also missing.
In a separate incident Saturday, Stephen Chamberlain, the former vice president of finance at Autonomy and a co-defendant in Lynch’s trial, died after being “fatally struck” by a car while out running in Cambridgeshire, Chamberlain’s lawyer told Reuters news agency.
Who is Mike Lynch?
Lynch, 59, is the founder of enterprise software firm Autonomy. He also runs Invoke Capital, a venture capital firm focused on backing European tech startups, which he founded in 2012.
He became the target of a protracted legal battle with Hewlett Packard after the technology firm accused Lynch of inflating Autonomy’s value in an $11.7 billion sale. HP took an $8.8 billion write-down on the value of Autonomy within a year of buying it.
Lynch was extradited from Britain to the U.S. last year to stand trial over the HP allegations. He faced criminal charges, including wire fraud and conspiracy for allegedly scheming to inflate Autonomy’s revenue starting in 2009 in a bid to entice a buyer.
But two months ago, Lynch, who has long denied the accusations, was acquitted of fraud charges in a surprise victory following the trial, which lasted for three months.
During the trial, Lynch took the stand in his own defense, denying wrongdoing and telling jurors that HP botched Autonomy’s integration.
Prosecutors had alleged Lynch, along with Autonomy’s now-deceased finance executive Chamberlain, padded Autonomy’s finances in a number of ways.
These included back-dated agreements and so-called “round-tripping” deals that sought to artificially inflate Autonomy’s sales by fronting cash cash to customers through fake contracts.
Lynch told jurors that he was focused on technology-related matters at Autonomy and left accounting and money decisions to the company’s then-chief financial officer, Sushovan Hussain.
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.
‘Britain’s Bill Gates’
Lynch was born in Ilford, a large town in East London, in 1965 and grew up near Chelmsford in the English county of Essex.
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.
Lynch held a lot of influence in the U.K. technology sphere at the height of his success, having once been dubbed Britain’s Bill Gates by the media.
He was previously on the board of U.K. broadcaster BBC. He also once served as an advisor to the British government on the Council for Science and Technology.
In his role as head of venture firm Invoke, Lynch was closely involved in helping British cybersecurity firm Darktrace and legal software startup Luminance get off the ground, backing both firms with sizable sums of cash.
Publicly-listed Darktrace, which had fended off similar allegations of inflating its revenues by U.S. short seller Quintessential Capital Management (QCM), earlier this year agreed a deal to bought out and taken private by U.S. private equity firm Thoma Bravo for $5.32 billion in cash.
Lynch previously made the Forbes’ billionaires list in 2014 and 2015, with an estimate net worth of $1 billion, according to the business news outlet. However, while facing legal costs in the dispute with HP, he dropped off the list in 2016.
Legal struggles aside, Lynch has several hobbies to keep him busy, including keeping and caring for cattle and pigs at his home in Suffolk.
“I keep rare breeds,” Lynch told LeadersIn during an 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.”
Lynch 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.
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 before the bell. Procter & Gamble — The stock fell 0.8% after reporting weaker-than-expected revenue. The household goods maker posted $21.74 billion in revenue while analysts polled by LSEG had estimated $21.91 billion. The company attributed the miss to lower demand in China. Adjusted earnings per share of $1.93 topped estimates of $1.90 per share. Netflix — Shares popped 6.3% after the streaming giant exceeded Wall Street’s third-quarter expectations. Netflix reported earnings per share of $5.40 on revenue of $9.83 billion, while analysts polled by LSEG forecast earnings of $5.12 a share on revenue of m $9.77 billion. The company also saw its ad-supported membership tier jump 34% quarter-over-quarter. CVS Health – Shares tumbled 11% after the drug store chain announced longtime executive David Joyner has replaced Karen Lynch as CEO. CVS also guided for third-quarter adjusted earnings between $1.05 and $1.10 per share, less than the $1.69 a share expected from analysts polled by Fact Set. WD-40 — The maintenance product maker’s shares fell 4% after a disappointing fiscal fourth-quarter earnings report. The company reported $1.23 earnings per share, versus FactSet consensus forecasts of earnings of $1.34 per share. Full-year earnings guidance between $5.20 and $5.45 per share also came in short of estimates for $5.69 per share. Western Alliance Bancorp — The regional bank stock dropped more than 4%. Despite posting a top-line beat of $823 million in revenue versus LSEG analysts’ estimates for $808 million, net interest income fell 3% in the third-quarter. American Express — Shares of the credit card company ticked down 3.4% on a mixed earnings report. Revenue of $16.64 billion fell short of the LSEG consensus forecast for $16.67 billion. However, earnings of $3.49 per share topped forecasts of $3.28. Apple — The tech giant advanced 2% after Bloomberg reported that iPhone sales in China jumped 20% year-over-year in the first three weeks of sales. Coherent — The semiconductor materials stock tumbled more than 5% after B.Riley downgraded shares to neutral from buy, citing limited upside potential after shares soared 142% in 2024. SLB — Shares dipped 1.7% after Schlumberger posted third-quarter revenue that fell short of estimates. Revenue of $9.16 billion fell below the $9.25 billion LSEG consensus forecast. On the other hand, adjusted earnings of 89 cents per share topped the 88 cents earnings per share expectation. Intuitive Surgical — The stock added more than 6% after the maker of the da Vinci surgical robot beat on both top and bottom lines in the third quarter. Intuitive Surgical earned $1.84 per share on $2.04 billion in revenue, while analysts surveyed by LSEG had predicted earnings of $1.63 per share on $2 billion in revenue. Ally Financial – The digital bank stock fell nearly 1% despite earnings beating analysts’ estimates in the third quarter. The company announced adjusted earnings per share of 95 cents on $2.1 billion in revenue. Analysts surveyed by FactSet had called for 52 cents earnings per share and revenue of $2.03 billion. Crown Holdings — The consumer goods packaging company ticked up more than 4% after raising its full-year guidance. Crown Holdings is guiding toward adjusted earnings per share falling between $6.25 and $6.35 per share. Analysts had expected $6.15 earnings per share, per FactSet. Adjusted earnings topped estimates in the third quarter, while revenue came in line with forecasts. Comerica — Shares of the mid-sized bank ticked up nearly 1% after a stronger-than-expected report for the third quarter. Comerica generated $1.33 in earnings per share on $534 million of revenue, compared to $1.17 per share and $527.9 million of revenue expected by analysts, according to FactSet. Net income for the bank was down year over year. — CNBC’s Pia Singh, Sarah Min, Jesse Pound, Michelle Fox contributed reporting
Barrons Roundtable discusses reports that Gen Z members are aggressive about wanting to retire.
Gen Z is the youngest generation of adults today, but with many struggling to make ends meet, a growing proportion say they do not expect to retire and few are socking away money to do so.
A new report from the TIAA Institute and UTA’s NextGen Practice found that a greater share of these adults age 27 and below do not anticipate retiring – at least in the traditional sense – after prior data showed nearly half of young adults either don’t want to retire, don’t believe they will be able to afford to, or are not thinking about it at all.
Gen Z as a whole has a very different view of retirement than previous generations, and a growing proportion of young adults say they do not plan on retiring at all. (iStock / iStock)
What’s more, just 20% of Gen Z respondents of working age say they are saving for retirement at all. While planning for retirement is important for everyone, saving for the future is critical for this generation that is projected to live past 100 years old. Yet, a higher cost of living could be impacting their ability to do so.
The study found that almost one-third of Gen Z (29%) are living paycheck-to-paycheck, with most of their money going to funding their basic needs, making it increasingly difficult for them to achieve financial milestones like homeownership while saving for their financial futures.
“Thirty-six percent of respondents cited high debt or low income as the primary reason they are not saving for retirement,” Surya Kolluri, head of the TIAA Institute told FOX Business. “Gen Z is spending more on essentials than previous generations.”
Inflation is weighing on Gen Z’s finances more than prior generations, data shows. (iStock / iStock)
Kolluri said it is true that Gen Z is bearing the brunt of inflation more than the generations that preceded them, noting that as of this year, the annual inflation rate for Gen Z was half a percent higher than it was for other generations at the same age.
But Kolluri pointed to some positive findings in the data, too. He said that while only 1 in 5 reported saving for retirement, 66% of those who are saving for retirement are doing so through 401(k)s.
Empower President and CEO Ed Murphy discusses retirement planning on ‘The Claman Countdown.’
There is also at least an awareness amid Gen Z’ers that it is important to save for the future. Eighty-four percent report saving a portion of their income each month (albeit not for retirement), and 57% say they have a budget that they stick to.
Kolluri noted 52% of Gen Z reported putting savings into savings accounts because they value the liquidity that supports current financial freedom.
“They do not equate saving for retirement as helping to ensure their financial freedom later in life…and ‘freedom’ is a concept that is very important to Gen Z,” he said. “They want flexibility and access to savings if and as they want.”