Case 3:18-cr-00577-CRB Document 288 Filed 01/17/24 Page 1 of 23
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`Jonathan Matthew Baum (SBN: 303469)
`Steptoe LLP
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`One Market Street
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`Steuart Tower, Suite 1070
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`San Francisco, CA 94105
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`Telephone: (510) 735-4558
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`jbaum@steptoe.com
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`Reid H. Weingarten
`Brian M. Heberlig
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`Michelle L. Levin
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`Nicholas P. Silverman
`Dwight J. Draughon
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`Drew C. Harris
`Steptoe LLP
`1114 Avenue of the Americas
`New York, NY 10036
`Telephone: (212) 506-3900
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`Christopher J. Morvillo
`Celeste L.M. Koeleveld
`Daniel S. Silver
`(Admitted Pro Hac Vice)
`Clifford Chance US LLP
`31 West 52nd Street
`New York, NY 10019
`Telephone: (212) 878-3437
`christopher.morvillo@cliffordchance.com
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`Attorneys for Defendant
`Michael Richard Lynch
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`UNITED STATES DISTRICT COURT
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` NORTHERN DISTRICT OF CALIFORNIA
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`Plaintiff,
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`vs.
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`UNITED STATES OF AMERICA,
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`MICHAEL RICHARD LYNCH and
`STEPHEN KEITH CHAMBERLAIN,
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`Defendants.
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` Case No.: 3:18-cr-00577-CRB
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`Judge: Hon. Charles Breyer
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`DEFENDANT MICHAEL RICHARD
`LYNCH’S MOTION IN LIMINE TO ADMIT
`POST-ACQUISITION EVIDENCE
`
`Date: February 21, 2024 at 2 p.m.
`Court: Courtroom 6 – 17th Floor
`Date Filed: January 17, 2024
`Trial Date: March 18, 2024
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`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO ADMIT POST-ACQUISITION
`EVIDENCE – 3:18-CR-00577-CRB
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`I.
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`II.
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`Case 3:18-cr-00577-CRB Document 288 Filed 01/17/24 Page 2 of 23
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`TABLE OF CONTENTS
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`Page Nos.
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`INTRODUCTION............................................................................................................. 1
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`THE POST-ACQUISITION EVIDENCE SHOULD BE ADMITTED ....................... 2
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`A.
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`B.
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`C.
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`Post-Acquisition Evidence Demonstrates that Allegedly Withheld Information
`was not Material to HP's Decision to Acquire Autonomy, and that HP Witnesses'
`Claims to the Contrary Are False............................................................................ 2
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`Post-Acquisition Evidence Rebuts the Government's Version of Events and
`Establishes that HP Was Not Defrauded ................................................................ 7
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`Post-Acquisition Evidence Demonstrates that Dr. Lynch Had No Intent and No
`Motive to Defraud and Supports His Anticipated Testimony .............................. 13
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`III. CONCLUSION ............................................................................................................... 15
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`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO ADMIT POST-ACQUISITION
`EVIDENCE – 3:18-CR-00577-CRB
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`Case 3:18-cr-00577-CRB Document 288 Filed 01/17/24 Page 3 of 23
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`TABLE OF AUTHORITIES
`Cases
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`Blackie v. Barrack,
`524 F.2d 891 (9th Cir. 1975) ...................................................................................................... 7
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` Page Nos.
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`Neder v. United States,
`527 U.S. 1 (1999) .................................................................................................................... 2, 7
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`United States v. Bogucki,
`No. 18-CR-00021-CRB-1, 2019 WL 1024959 (N.D. Cal. Mar. 4, 2019) .............................. 2, 3
`
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`United States v. Galecki,
`89 F.4th 713 (9th Cir. Dec. 27, 2023) ..................................................................................... 3, 4
`
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`United States v. Green,
`698 F. App'x 879 (9th Cir. 2017) ................................................................................................ 2
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`United States v. Hanley,
`190 F.3d 1017 (9th Cir. 1999) .................................................................................................... 2
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`United States v. Lindsey,
`850 F.3d 1009 (9th Cir. 2017) .................................................................................................... 2
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`United States v. Litvak,
`808 F.3d 160 (2d Cir. 2015)........................................................................................................ 7
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`United States v. Schena,
`No. 5:20-CR-00425-EJD-1, 2022 WL 2910185 (N.D. Cal. July 23, 2022) ........................... 2, 4
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`United States v. Stever,
`603 F.3d 747 (9th Cir. 2010) ...................................................................................................... 6
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`United States v. Yang,
`Case No. 16-CR-00334-LHK, 2019 WL 5536213 (N.D. Cal. Oct. 25, 2019) ............................... 3
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`Universal Health Servs., Inc. v. United States ex rel. Escobar,
`579 U.S. 176 (2016) ................................................................................................................ 3, 5
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`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO ADMIT POST-ACQUISITION
`EVIDENCE – 3:18-CR-00577-CRB
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`Case 3:18-cr-00577-CRB Document 288 Filed 01/17/24 Page 4 of 23
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`Statutes and Rules
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`18 U.S.C. §1343 .............................................................................................................................. 2
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`Fed. R. Crim. P. 17(c) ................................................................................................................... 13
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`Fed. R. Crim. P. 29 ......................................................................................................................... 3
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`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO ADMIT POST-ACQUISITION
`EVIDENCE – 3:18-CR-00577-CRB
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`(ii)
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`(iii)
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`SUMMARY OF ARGUMENT
`Defendant Michael Richard Lynch moves in limine to offer evidence that is critical for
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`him to mount a full and fair defense, including Brady material that exculpates Dr. Lynch and
`makes clear that he is innocent. Specifically, Dr. Lynch seeks to offer at trial:
`evidence that senior HP executives were fully aware of Autonomy's hardware
`(i)
`sales before the deal was signed, and did nothing to stop or even investigate the
`circumstances of such sales (all before a purported whistleblower came forward in
`May 2012);
`evidence of HP's mismanagement of Autonomy, leading to substantial revenue
`misses in Q1 and Q2 2012, which Dr. Lynch witnessed during his tenure as CEO
`of HP-Autonomy until May 2012;
`evidence that HP falsely blamed more than $5 billion of its $8.8 billion write-
`down of Autonomy's value on a purported fraud in November 2012, when HP
`knew full well that HP's own failures to achieve the synergies it had projected
`after the acquisition were the cause of any drop in Autonomy's value; and
`evidence that Christopher Yelland's hindsight-infused restatement of Autonomy's
`accounts was falsely designed to support HP's blame-Autonomy game and its
`litigation strategy.
`As explained further in this motion in limine, this evidence is crucial to demonstrating the lack of
`materiality of information that was allegedly withheld from HP during the acquisition process; to
`impeaching the credibility of witnesses the government will call to try to establish materiality; to
`rebutting the government's allegation that HP was in fact defrauded and suffered substantial
`losses; and to establishing Dr. Lynch's lack of intent and motive to defraud, particularly since Dr.
`Lynch will testify at trial.
`The evidence is also necessary to meeting and rebutting the government's anticipated
`proof about events that post-date HP's acquisition of Autonomy in October 2011. Although it
`has not yet specified exactly what or how, the government has made clear that it intends to rely
`on post-acquisition evidence at trial. In its Supplementary Bill of Particulars ("SBOP") filed on
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`(iv)
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`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO ADMIT POST-ACQUISITION
`EVIDENCE – 3:18-CR-00577-CRB
`iv
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`

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`December 18, 2023, see ECF No. 271, the government stated that "[b]roadly," it would "not seek
`to adduce evidence of facts and circumstances after approximately October 2011, when HP's
`acquisition of Autonomy was consummated." SBOP at 5. Leaving a hole big enough to drive a
`truck through, the government continued:
`There will be exceptions, however. Those exceptions will be for percipient witnesses and
`other evidence evaluating or discussing Autonomy during the relevant period of 2009-
`2011 after-the-fact. For example, these exceptions include, but are not limited to, ASL's
`restatement and the testimony of Christopher Yelland, Antonia Anderson, John Schultz,
`Joel Scott, Steven Brice, and possibly others.
`SBOP at 5. Without further specifying what facts and circumstances these witnesses will testify
`about, the government promised to make a motion in limine "with regard to these exceptions and
`seek the Court's prior approval before adducing evidence relating to events occurring after []
`October 2011." Id. At a minimum, then, it appears that the government anticipates calling
`several witnesses who will testify regarding actions they took following the acquisition.
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`If the Hussain trial is any guide, the government—while "broadly" disclaiming reliance
`on post-acquisition evidence—will offer proof that HP was in fact the victim of a massive fraud;
`that HP was "shocked" when it learned about the hardware sales and other purported accounting
`irregularities after the acquisition; that Autonomy would have been worth drastically less to HP
`if it had known about the hardware sales and the alleged accounting irregularities prior to
`negotiating a purchase price; that Autonomy missed its revenue targets in Q1 and Q2 2012
`because it could no longer rely on pre-acquisition fraudulent practices; and that the alleged fraud
`caused substantial losses to HP and its shareholders.
`But the government should not be permitted to rely on post-closing evidence—such as
`Yelland's Restatement, testimony from Anderson, Scott, and Schultz, and other evidence it
`claims establishes that HP was defrauded and suffered significant losses—to argue that the deal
`was disastrous for HP and that HP vastly overpaid for Autonomy, while Dr. Lynch is precluded
`from presenting exculpatory evidence that puts the lie to the government's case. Dr. Lynch must
`be permitted to present evidence that there was no fraud, and that HP's statements regarding the
`reasons for Autonomy's purported poor performance were false. That evidence will demonstrate
`what was and what was not material to HP; that Dr. Lynch was not responsible for any
`
`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO ADMIT POST-ACQUISITION
`EVIDENCE – 3:18-CR-00577-CRB
`v
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`

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`Case 3:18-cr-00577-CRB Document 288 Filed 01/17/24 Page 7 of 23
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`diminution in value of Autonomy following the acquisition; that Autonomy remained the
`successful company with the magical product that HP purchased even though HP failed to
`achieve the synergies it projected; and that the write-down had nothing to do with Autonomy's
`accounting practices. Due process and fairness require Dr. Lynch's motion to be granted, and
`any effort by the government to seek to preclude such exculpatory evidence while presenting a
`cherry-picked, false narrative to the jury should be rejected.
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`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO ADMIT POST-ACQUISITION
`EVIDENCE – 3:18-CR-00577-CRB
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`I.
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`MEMORANDUM OF POINTS AND AUTHORITIES
`INTRODUCTION
`Evidence from the post-acquisition period undermines the government's allegations of
`accounting fraud at every step in the chronology of events and impugns the bases for HP's claim
`of fraud and the credibility of its witnesses. The exculpatory evidence is critical to Dr. Lynch's
`defense and should be admitted to rebut the government's version of events, particularly in light
`of the government's stated intention to offer post-acquisition evidence and Dr. Lynch's intention
`to testify in his own defense. Specifically, the post-acquisition Brady evidence is relevant and
`admissible for the following three reasons: (i) it demonstrates that information HP alleges was
`withheld during the due diligence process—such as evidence of hardware sales—was not
`material to HP's decision to purchase Autonomy, and therefore HP was not defrauded; (ii) it
`counters the government's theory of the case by establishing that HP was not the victim of a
`massive fraud but instead scapegoated Autonomy for its own failure to integrate and support
`Autonomy following the acquisition; and (iii) it supports Dr. Lynch's defense that he did not
`intend to defraud HP and that he had no motive or incentive to do so.
`During the Hussain trial, the defense was permitted to present limited post-closing
`evidence, including limited cross-examination of former HP employee Manish Sarin about an
`email regarding Autonomy's hardware sales that he received after the closing, a brief stipulation
`about the transfer of Autonomy's books and records to HP after the closing and about Sushovan
`Hussain's continued employment at Autonomy after the acquisition, and cross-examination of
`Yelland about his preparation of the ASL Restatement of accounts. The vast majority of
`Hussain's proffered post-closing evidence was precluded, however, and the defense was severely
`hamstrung in its ability to rebut the government's presentation regarding materiality, reliance,
`causation, and loss. Dr. Lynch respectfully disagrees with the rulings in the Hussain trial, which
`the Ninth Circuit affirmed as within the Court's discretion. But this trial is not Hussain 2.0, and
`the evidentiary rulings in Hussain are not binding here. The trial of Dr. Lynch involves different
`allegations, different evidence, and a different defense, including—most crucially—Dr. Lynch's
`anticipated testimony about his state of mind. These differences require a fresh examination of
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`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO ADMIT POST-ACQUISITION
`EVIDENCE – 3:18-CR-00577-CRB
`1
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`the relevance, admissibility, and probative value of the post-acquisition evidence. As set forth
`herein, that fresh examination—made with the clean slate to which Dr. Lynch is entitled—leads
`to the conclusion that the post-acquisition exculpatory evidence must be admitted.
`THE POST-ACQUISITION EVIDENCE SHOULD BE ADMITTED
`II.
`Post-Acquisition Evidence Demonstrates that Allegedly Withheld
`A.
`Information was not Material to HP's Decision to Acquire Autonomy, and
`that HP Witnesses' Claims to the Contrary Are False
`To establish that Dr. Lynch and others defrauded HP, the government must prove that
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`information allegedly withheld from HP during the due diligence process was "material." See
`United States v. Bogucki, No. 18-CR-00021-CRB-1, 2019 WL 1024959, at *2 (N.D. Cal. Mar. 4,
`2019) (citing Ninth Circuit Model Jury Instruction 8.124 and 18 U.S.C. § 1343). "[A] false
`statement satisfies the materiality element of wire fraud if it has 'a natural tendency to influence,
`or [is] capable of influencing,' the decision of the decisionmaking body to which it was
`addressed." Id. at *2 (citing United States v. Lindsey, 850 F.3d 1009, 1013 (9th Cir. 2017)
`(internal quotation marks omitted)); see also Neder v. United States, 527 U.S. 1, 16 (1999). "It
`need not actually have influenced a decisionmaker." Id. (citing Neder, 527 U.S. at 16).
`"Whether or not a statement is so capable is evaluated objectively." Id. (citing Neder, 527 U.S.
`at 16). "In addition, materiality must be assessed in the context in which the communications
`occurred; in consequence, industry practices, agreements between the parties, and other
`information known to the parties at the time of the allegedly false statements are relevant to
`assessing those statements' materiality." Id. (citing United States v. Green, 698 F. App'x 879,
`880 (9th Cir. 2017)).
`Thus, while a victim's gullibility is generally not relevant, see United States v. Hanley,
`190 F.3d 1017, 1023 (9th Cir. 1999), "evidence of the circumstances surrounding a victim's
`entanglement in the fraudulent scheme may be admissible for other purposes. Indeed,
`documents and other information available to the parties can be useful for determining
`materiality." United States v. Schena, No. 5:20-CR-00425-EJD-1, 2022 WL 2910185, at *4
`(N.D. Cal. July 23, 2022) (citing Bogucki, 2019 WL 1024959, at *4). "Relatedly, a victim's
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`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO ADMIT POST-ACQUISITION
`EVIDENCE – 3:18-CR-00577-CRB
`2
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`

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`knowledge of the fraud could serve as relevant impeachment evidence." Id. (citing United States
`v. Yang, 16-CR-00334-LHK, 2019 WL 5536213, at *3 (N.D. Cal. Oct. 25, 2019)).
`
`In Bogucki, for example, the Court determined that the materiality of alleged
`misstatements had not been established by examining the context in which the misstatements
`occurred. Even though the purported victim—an HP trader named Nesper—testified that he
`believed Bogucki's representations about his currency trading activity at Barclays, the Court
`concluded that those representations were not material "in light of the relationship of the parties,
`the agreement governing their interactions, industry practice, HP's own dishonesty, and Nesper's
`expectations as to Barclays' dishonesty." Bogucki, 2019 WL 1024959, at *7. That context, the
`Court found in granting Bogucki's Fed. R. Crim. P. 29 motion for a judgment of acquittal,
`precluded a jury finding beyond a reasonable doubt "that it was objectively reasonable for HP to
`be influenced by the statements the Government [had] identified." Id.
`
`The context of allegedly false and misleading statements was similarly dispositive in the
`Ninth Circuit's recent decision in United States v. Galecki, 89 F.4th 713 (9th Cir. 2023), in which
`the Court reversed the defendants' convictions for mail and wire fraud in connection with the sale
`of "potpourri" containing cannabis that was, contrary to the coded language the defendants used
`with retailers, meant to be smoked. That coded language was not deceptive to the retail shops to
`whom it was addressed, however, because those retail shops understood full well that they were
`receiving a cannabis-laced product meant to be smoked, not an air freshener, despite the fact that
`the defendants explicitly stated that the "potpourri" was "not for human consumption." In
`reaching this conclusion, the Court emphasized that "materiality is judged in relation to the
`persons to whom the statement is addressed." Id. at 737 (emphasis in original) (citations
`omitted). "Under any understanding of the concept, materiality looks to the effect on the likely
`or actual behavior of the recipient of the alleged misrepresentation." Id. (quoting Universal
`Health Servs., Inc. v. United States ex rel. Escobar, 579 U.S. 176, 193 (2016)). The Court
`concluded that the defendants' representations about their "potpourri" were not "materially false"
`because "the purchasers all understood, and were in on, the charade." Id. at 738. That
`conclusion, in turn, was supported by testimony from owners and employees of the smoke shops
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`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO ADMIT POST-ACQUISITION
`EVIDENCE – 3:18-CR-00577-CRB
`3
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`who actually purchased and sold the products. Id. Materiality, in other words, was not judged in
`the abstract, but in the context in which the representations were made. See also Schena, 2022
`WL 2910185, at *4–5 (observing that "evidence of the circumstances surrounding a victim's
`entanglement in the fraudulent scheme may be admissible for other purposes, such as materiality
`and impeachment").
`
`Likewise here, even though the materiality of misrepresentations is judged objectively,
`the context of the alleged misrepresentations regarding hardware sales is critical to determining
`materiality. In other words, materiality must be judged in relation to HP, "the persons to whom
`the statement is addressed." Galecki, 89 F.4th at 737 (emphasis original). Indeed, the
`government will doubtless elicit testimony from HP witnesses that they were unaware of
`Autonomy's hardware sales and would have found them material had they known about them.
`To counter that evidence, Dr. Lynch must be permitted to elicit testimony that (i) confirms that
`HP was advised during due diligence of hardware sales and understood that those sales were not
`appliances; (ii) demonstrates that hardware sales were not material to HP's valuations of
`Autonomy and, by extension, HP's decision to acquire Autonomy; and (iii) undermines the
`credibility of HP witnesses who claim that they were "shocked" when they purportedly learned
`about hardware sales for the first time after the acquisition.
`Thus, Dr. Lynch should be allowed to present post-acquisition evidence of how HP built
`substantial low-margin, pass-through hardware sales into Autonomy's revenue forecasts for
`throughout 2012. At the percentage of revenue and margins they were projecting, Yelland and
`other HP executives could not have understood these hardware sales to have been appliance
`sales. Moreover, the hardware revenue was treated as part of license revenue, just as it had been
`by Autonomy pre-acquisition. That hardware sales continued seamlessly as normal, pass-
`through sales from pre-acquisition to post-acquisition corroborates Dr. Lynch's position that HP
`learned about the hardware sales during the acquisition and did not think they were just
`appliances, as Sarin and Andy Gersh of KPMG now maintain.
`Dr. Lynch should also be permitted to present evidence that when Cathie Lesjak, Sarin,
`Yelland, and others were presented with evidence of Autonomy's hardware sales after the
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`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO ADMIT POST-ACQUISITION
`EVIDENCE – 3:18-CR-00577-CRB
`4
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`acquisition, they did not act surprised or shocked, nor did they cry foul. A month after the
`acquisition, on November 11, 2011, for example, HP's auditor, Ernst & Young ("EY"), made a
`presentation—the "Q4 FY'11 CFO update"—to Lesjak. Although the presentation consisted of
`only three slides, including a simple four-bullet slide which stated that Autonomy's "[r]evenue
`includes $115M of hardware[,]" Lesjak did not flinch at this information, nor did anyone else.
`Likewise, on November 15, 2011, Kathryn Harvey brought to Sarin's attention via email that
`Autonomy had "approximately $100M/year in revenue coming from the sale of Dell HW
`[hardware] products," which did not, in her view, "have any impact on our valuations."
`Although Sarin has testified since that he was "astonished" upon learning of Autonomy's
`hardware revenues, Sarin expressed no surprise or concern when he received this email. Instead,
`he responded matter-of-factly that the hardware revenues may have been part of Autonomy's
`efforts "to grow their 'appliance' business ie. Autonomy software bundled on industry-standard
`Dell hardware," and even noted that such activities could prove to be beneficial.
`"[M]ateriality looks to the effect on the likely or actual behavior of the recipient of the
`alleged misrepresentation." Universal Health Servs., 579 U.S. at 193 (cleaned up) (citation
`omitted). Had the hardware sales truly been hidden from HP and had they truly been material,
`one would certainly expect HP to cry foul when presented with evidence of those sales right after
`the acquisition. That HP failed to react, when told about hardware, in a manner consistent with
`being defrauded plainly supports an inference that it was not defrauded. Post-acquisition
`evidence would likewise demonstrate that purported revelations about Autonomy's reseller deals,
`so-called reciprocal transactions, and hosting revenues were not revelations at all.
`Dr. Lynch should also be allowed to present evidence of HP's valuations of Autonomy
`after the acquisition (including both valuations created by HP internally, and valuations created
`for HP by its consultants and auditors)—valuations that did not change materially despite the
`purported revelations about hardware sales and accounting irregularities. For example, in
`summer 2012, HP considered whether there was a need to take a write-down against Autonomy's
`book value (the value of the company as reflected on HP's balance sheet) in light of its reduced
`earnings forecast following the unsuccessful integration of Autonomy's business into HP. Even
`
`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO ADMIT POST-ACQUISITION
`EVIDENCE – 3:18-CR-00577-CRB
`5
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`

`

`Case 3:18-cr-00577-CRB Document 288 Filed 01/17/24 Page 13 of 23
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`at that point in July, after hearing from a whistleblower about alleged accounting misconduct and
`having had full access to Autonomy's books and records for almost one year, HP internally
`concluded that Autonomy was worth $13.7 billion, $2 billion more than what HP had recently
`paid for it. HP's accountants attributed Autonomy's poor performance to the challenges of
`operating Autonomy in the HP environment. As a result, HP's leadership did not see
`Autonomy's temporary struggles as indicative of longer-term revenue and margin projections. In
`short, there was no claim of fraud. Even after the write-down, when HP claimed that over $5
`billion of the $8.8 billion write-down of Autonomy was attributable to accounting misconduct at
`Autonomy before the acquisition, EY concluded that revenue adjustments due to alleged
`accounting irregularities would not have had a material impact on HP's original valuation of
`Autonomy ("less than $300 million"), and therefore the "known accounting errors [do] not
`materially impact the valuation" at the time of the acquisition.1
`The government may argue that HP could have had other reasons not to react to
`information about hardware sales, but that does not mean evidence of HP's reaction is not
`logically relevant and probative. See United States v. Stever, 603 F.3d 747, 754 (9th Cir. 2010)
`("logically relevant evidence" cannot be dismissed "as speculative"). The fact that senior HP
`executives like Sarin and Lesjak did not blink when they received evidence of hardware sales
`shortly after the acquisition, that HP continued hardware sales after the acquisition in a manner
`that shows they knew all along that those sales were not appliances, and that knowledge of those
`sales and other adjustments due to alleged accounting irregularities had no material impact on
`HP's valuation of Autonomy, supports an inference that the hardware sales and the accounting
`irregularities were either known to HP, and/or were not material to HP. If the government
`introduces evidence of HP's subjective understanding of Autonomy's hardware sales as evidence
`of materiality, as it did in Hussain, defense evidence (including post-acquisition evidence) that
`the "victim" understood the hardware sales and proceeded to deal anyway is at least as probative
`
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`1 As noted infra at 8, one of HP's preacquisition models valued Autonomy at $17.6 billion,
`taking synergies into account.
`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO ADMIT POST-ACQUISITION
`EVIDENCE – 3:18-CR-00577-CRB
`6
`
`

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`of materiality as the subjective views of investors like HP. See Neder, 527 U.S. at 24 (a
`statement is not material if it is "incapable of influencing the intended victim"); cf. Blackie v.
`Barrack, 524 F.2d 891, 908 (9th Cir. 1975) ("subjective reliance" and materiality share "same
`causal nexus"). This is particularly true because of HP's sophistication. See United States v.
`Litvak, 808 F.3d 160, 185 (2d Cir. 2015) (victim's "sophistication" is relevant to "adequacy of
`[defendant's] disclosure" and "materiality").
`Finally, evidence that the hardware sales were not material to HP also tends to disprove
`fraudulent intent. It makes no sense to hide something that makes no difference to the person
`being kept in the dark. The evidence should be admitted.
`Post-Acquisition Evidence Rebuts the Government's Version of Events and
`B.
`Establishes that HP Was Not Defrauded
`Dr. Lynch anticipates that the government—consistent with the allegations in the
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`superseding indictment—will argue that HP was in fact victimized and defrauded by Autonomy
`and that the acquisition was catastrophic for HP's shareholders. Such arguments featured
`prominently in the Hussain trial, where the government alleged in its opening that "HP
`determined to buy Autonomy for nearly $11 billion," Hussain Tr. at 46:1–2, "based on the false
`financial statements the defendant had prepared, and based on the false statements he made in the
`due diligence," id. at 45:24–46:1, and argued that "[t]he deal ultimately proved disastrous for
`HP," id. at 46:3. The government will also argue that Autonomy faltered after the acquisition
`with substantial revenue misses that can be attributed to Autonomy's inability, as part of HP, to
`engage in the accounting improprieties and revenue-inflating maneuvers that kept it afloat before
`the acquisition. And the government will doubtless insist that the magnitude of the loss to HP—
`which it claimed spent $11 billion on "a Pinto" when it thought it was buying "a Cadillac,"
`Hussain Tr. at 42:15—is directly attributable to those accounting irregularities, which enabled
`Autonomy to falsely inflate the value of the company. Indeed, by suggesting that HP got a Pinto
`when it thought it was buying a Cadillac for $11 billion, the government will ask the jury to
`conclude that Dr. Lynch caused a massive multi-billion-dollar loss even if reliance and causation
`are not elements of the alleged offenses.
`
`DEFENDANT MICHAEL RICHARD LYNCH’S MOTION IN LIMINE TO ADMIT POST-ACQUISITION
`EVIDENCE – 3:18-CR-00577-CRB
`7
`
`

`

`Case 3:18-cr-00577-CRB Document 288 Filed 01/17/24 Page 15 of 23
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`To counter the notion that HP was defrauded and that it suffered a massive loss, as
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`reflected inter alia in Yelland's Restatement and in the so-called "balance sheet of fraud" (the
`government's running tally in its closing argument in the Hussain trial of allegedly improper
`revenue that Autonomy recognized from 2009 to 2011), Dr. Lynch should be permitted to
`present exculpatory evidence—including evidence from after the acquisition—that rebuts each of
`these points the government is expected to make at trial. Thus, Dr. Lynch seeks to offer:
`Evidence that HP's valuation of Autonomy turned on anticipated synergies from
`combining HP's Vertica, which handled structured data, with Autonomy's IDOL, which handled
`unstructured data, for a combined juggernaut that would corner the data processing and storage
`market across HP's vast consumer network: 2 The acquisition was the brainchild of Leo
`Apotheker, HP's prior CEO, and Shane Robison, HP's CTO and