Investigation by the Serious Fraud Office into claims of fraud at Autonomy
The UK Serious Fraud Office (SFO) has concluded its investigation into Autonomy, a Cambridge-based information management provider, regarding allegations of accounting improprieties, misrepresentations, and disclosure failures. The SFO, an investigative body in the UK, did not find sufficient evidence to take action against Autonomy's former executives.
The investigation was first revealed in a regulatory filing by HP on February 6, 2013, following HP's acquisition of Autonomy for approximately $10.2 billion in 2011. HP later wrote down the value of its software to the tune of $8.8 billion, citing serious accounting misconduct that inflated Autonomy's value.
Before HP's acquisition, Alan Pelz-Sharpe, an information management analyst, reported Autonomy to the SFO. Pelz-Sharpe received a dossier of allegedly incriminating information on Autonomy's accounting practices from an anonymous source, believed to be an Autonomy insider, which he passed on to the SFO.
The SFO's investigation was initiated in response to HP's accusations, and the office has used its powers of investigation to test the allegations. HP has provided the SFO, the US Department of Justice, and the Securities and Exchange Commission with information related to accounting improprieties, disclosure failures, and misrepresentations at Autonomy before its acquisition.
The SFO has stated that the use of Autonomy's product, Introspect, does not pose a conflict of interest. The office is currently making inquiries to ensure it can continue as the investigating body.
The SFO's investigation into Autonomy's accounting practices is not the first time the company has been under scrutiny. In 2025, a UK court ruled that while Autonomy’s financials were overstated, this only explained part of HP’s loss, and HP's own due diligence failures significantly contributed to the problem. The judge found that about 80% of HP’s initial valuation loss was unrelated to misconduct, casting doubt on HP's claims being fully accurate.
In parallel, some Autonomy executives faced U.S. criminal prosecutions. Autonomy CFO Sushovan Hussain was convicted of fraud and sentenced to five years in prison, and founder Mike Lynch was indicted in the U.S., though Lynch denied wrongdoing and died before resolution.
In summary, the SFO itself did not confirm evidence sufficient for prosecution of Autonomy executives, but UK civil courts did find misrepresentations that partially justified HP's claims, though also highlighting HP's own failings. The case remains complex, with mixed findings on misconduct by Autonomy's former executives.
The SFO's investigation into the accounting practices of Autonomy, a former information management provider, is closely linked to the business and finance sectors, as it revolves around allegations of accounting improprieties, misrepresentations, and disclosure failures that reportedly led to the write-down of the company's value by a significant amount following its acquisition. The office's findings have implications for the business world, as they touch upon issues of corporate accountability and transparency in high-value transactions.
