Case 3:18-cr-00577-CRB Document 314 Filed 02/01/24 Page 1 of 13
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`PATRICK D. ROBBINS (CABN 152288)
`Attorney for the United States
`Acting Under Authority Conferred by 28 U.S.C. § 515
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`MARTHA BOERSCH (CABN 126569)
`Chief, Criminal Division
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`ROBERT S. LEACH (CABN 196191)
`ADAM A. REEVES (NYBN 2363877)
`KRISTINA N. GREEN (NYBN 5226204)
`ZACHARY G.F. ABRAHAMSON (CABN 310951)
`Assistant United States Attorneys
`
`450 Golden Gate Avenue, Box 36055
`San Francisco, California 94102-3495
`Telephone: (415) 436-7014
`Fax: (415) 436-7234
`Email: Robert.Leach@usdoj.gov
`
`Attorneys for United States of America
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`SAN FRANCISCO DIVISION
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`CASE NO. 18-577-CRB
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`UNITED STATES’ OPPOSITION TO
`DEFENDANT LYNCH’S MOTION IN LIMINE TO
`ADMIT POST-ACQUISITION EVIDENCE
`
`Pretrial Conference: February 21, 2024
`Trial Date: March 18, 2024
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`
`UNITED STATES OF AMERICA,
`Plaintiff,
`
`)
`)
`)
`)
`v.
`)
`)
`
`MICHAEL RICHARD LYNCH and STEPHEN )
`KEITH CHAMBERLAIN,
`)
`)
`Defendant.
`)
`)
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`
`
`
`INTRODUCTION
`Six years ago, deep into the trial of former Autonomy Chief Financial Officer Sushovan Hussain,
`the defense called a witness to the stand. The witness was Cathie Lesjak, Hewlett-Packard’s top finance
`executive at the time of the Autonomy acquisition. Hussain’s lawyer began his examination and soon the
`parties were arguing outside the presence of the jury about what Hussain could elicit about HP around
`the time of the October 2011 acquisition. “The question,” the Court said in colloquy with counsel, “is
`the crime itself, if it did occur, it occurred before October [2011], and the fact that [HP] mismanaged . . .
`
`U.S. OPP. TO LYNCH MIL RE
`POST-ACQ EVIDENCE, CASE NO. CR 18-577 CRB 1
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`Case 3:18-cr-00577-CRB Document 314 Filed 02/01/24 Page 2 of 13
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`even if it’s relevant, would introduce a whole host of issues that the Court would not entertain.” Hussain
`Trial Tr. 5561:4-11.
`Exactly.
`A year later, events in England would prove the sagacity of this Court’s concerns about the
`unwieldy nature of a retrospective into HP’s integration of Autonomy. Embarking on “a 93-day trial
`which [the English judge] believe[d] may rank amongst the longest and most complex in English legal
`history,” a United Kingdom court amassed a “trial bundle containing more than 36,000 documents” and
`reviewed closing submissions that alone spanned almost 5,000 pages (including “in aggregate some
`10,000 footnotes”).1 Such was the price of the court’s inquiry into various chapters of aftermath from
`HP’s acquisition.
`This Court has made plain its desire to avoid such a scorched-earth proceeding, which would
`raise profound difficulties for jurors while contributing little to the determination of facts relevant to the
`fraud claims here. Nothing in Lynch’s motion to admit post-acquisition evidence should alter that
`conclusion. Lynch’s proffered “materiality” evidence is a retread from Hussain that bears minimally, if
`at all, on the intrinsic capabilities of Autonomy’s misrepresentations. And Lynch’s so-called “rebuttal”
`evidence marks a naked attempt to shift the blame for the Autonomy debacle to HP itself. The Court
`should exclude the evidence in order to preserve a manageable trial focused on the facts that jurors will
`have to decide.
`
`
`ARGUMENT
`THE COURT SHOULD EXCLUDE THE POST-ACQUISITION EVIDENCE THAT
`LYNCH CLAIMS IS RELEVANT TO MATERIALITY.
`A. Lynch’s view of the law would improperly convert materiality’s objective standard into
`a subjective one.
`
`Lynch’s effort to make this trial about HP’s treatment of his “hugely successful cash-laden
`company,” Mot. at 14:13-16, starts from a strained reading of materiality. That reading stretches an
`unobjectionable notion, that industry standards matter to determining the materiality of misstatements,
`
`I.
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`1 See ACL Netherlands BV v. Lynch, [2002] EWHC 1178 (Ch) (May 17, 2022), 2022 WL
`01557021 at ¶ 7.
`U.S. OPP. TO LYNCH MIL RE
`POST-ACQ EVIDENCE, CASE NO. CR 18-577 CRB 2
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`all the way to the point of subjectivity: “[M]aterality must be judged in relation to HP,” Lynch claims.
`Mot. at 4:8-9. Not so: As this Court described the law after the Hussain trial in July 2018, “materiality is
`an objective standard, and actual reliance is not an element of any of the charges the government
`brought.” See Order Denying Motions for New Trial and Judgment of Acquittal (hereinafter “Hussain
`New Trial Order”) at 61:25-27, United States v. Hussain, CR 16-642 CRB (N.D. Cal. Jul. 30, 2018),
`ECF No. 419 (quoting United States v. Lindsey, 850 F.3d 1009, 1014 (9th Cir. 2017) (emphasis added)).
`“The misrepresentation need only have an objective propensity to influence its intended target.” Id.
`Lynch asks the Court to turn that statement on its head—just as Hussain tried in 2018. See Hussain Trial
`Tr. 5564:13-15 (“[Mr. Keker]: The issue that we see that is raised in this case is . . . what was material to
`HP in buying Autonomy[.] [The Court]: I thought the real issue under the law is whether it would be
`material to an objective individual hearing the same things.”) (emphasis added). Lynch relies mainly on
`two cases for this position—United States v. Bogucki, No. 18-CR-00021-CRB, 2019 WL 1024959 (N.D.
`Cal. Mar. 4, 2019), and United States v. Galecki, 89 F.4th 713 (9th Cir. 2023). But neither case requires
`the admission of Lynch’s post-acquisition evidence.
`As this Court may remember, Bogucki arose from a relationship between a company
`(coincidentally, Hewlett-Packard) and a bank, Barclays. The government alleged that a Barclays
`employee defrauded HP by misappropriating its confidential information and misleading the company
`about whether Barclays would take advantage of what HP disclosed. At trial, the Court granted a Rule
`29 motion largely due to the relationship between Barclays and HP: The two “were engaged as
`principals at opposite sides of an arms-length transaction,” the Court explained. See Order Granting
`Defendant’s Rule 29 Motion at 3:26-28, United States v. Bogucki, No. 18-CR-00021-CRB (N.D. Cal.
`Mar. 4, 2019) ECF No. 217. And Barclays, the Court said, was free to hedge in anticipation of client
`trades. Id. at 4-5. Those rules of the road, so to speak, “matter[ed] because someone in [HP’s] position
`would evaluate the statements Bogucki made to him against [that] backdrop.” Id. at 5:8-9.
`Defendant Lynch would draw from Bogucki permission to do what Lindsey says he may not:
`blame a victim’s negligence for falling for a fraud. See Lindsey, 850 F.3d at 1015 (“A false statement is
`material if it objectively had a tendency to influence, or was capable of influencing, a lender to approve
`a loan. . . . This standard is not concerned with a statement's subjective effect on the victim, but only ‘the
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`U.S. OPP. TO LYNCH MIL RE
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`intrinsic capabilities of the false statement itself.’”) (internal citation omitted). In truth, Bogucki tells a
`different story: The objective expectations of a party to a transaction—for example, the expectation that
`a publicly traded acquisition target would truthfully report its finances—are the critical lens through
`which evidence of fraud must be received.
`Galecki—the second case invoked by Lynch to admit post-acquisition evidence—stands for the
`same principle. There, the Ninth Circuit considered the materiality of falsehoods related to a synthetic
`cannabinoid product. See Galecki, 89 F. 4th at 737. The product’s manufacturer said that it was a
`“potpourri” and “not for human consumption.” Id. But the government’s trial evidence showed the
`product’s “purchasers all understood, and were in on, the charade” and knew that the product could be
`smoked. Id. at 738 (emphasis added). That evidence consisted of testimony from various industry
`representatives about the state of knowledge about the “potpourri” within the industry generally. See id.
`(citing sales employee’s testimony that “when she used the words ‘spice or incense or potpourri’ to refer
`to Zencense's products on sales calls to retailers, they ‘knew what you were talking about.’”). The case
`hardly stands for—and indeed disclaims, see id. at 737—the proposition that the subjective knowledge
`of a single listener can render a falsehood immaterial.
`Time and time again, the Ninth Circuit has rejected that contention, which would transform
`materiality into a subjective standard. See, e.g., Lindsey, 850 F.3d at 1015 (“That the lenders here might
`have intentionally disregarded Lindsey’s false statements has little relevance to whether those statements
`are intrinsically able to influence a decision.”), United States v. Farrace, 805 F. App'x 470, 474 (9th Cir.
`2020) (“The excluded evidence Farrace identifies pertains to the individual lenders’ specific behavior
`and actual reliance on Farrace's statements, which are irrelevant to the materiality inquiry.”), United
`States v. Kuzmenko, 775 F. App'x 272, 274 (9th Cir. 2019) (“[N]either individual victim lender
`negligence or an individual victim lender’s intentional disregard of relevant information are defenses to
`wire fraud”) (emphasis added).
`Nor is it necessary to adduce Lynch’s post-acquisition evidence to rebut the government’s
`position that Autonomy’s misrepresentations were material: As this Court explained in its order denying
`Hussain’s new trial motion, the defense’s task will be “to put on evidence that would tend to rebut or
`impeach the assertions of not only the HP witnesses but also the market analysts who testified that
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`U.S. OPP. TO LYNCH MIL RE
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`Autonomy’s misrepresentations regarding its software sales were material— that is, increased the
`company’s perceived value.” Hussain New Trial Order at 62:14-17; accord Lindsey, 850 F.3d at 1016
`(“Among other things, defendants can disprove materiality through evidence of the lending standards
`generally applied in the mortgage industry. . . . As long as defendants do not stray into evidence of the
`behavior of individual lenders . . . defendants may attack materiality though industry practice.”). Put
`simply—adopting the right materiality standard leaves plenty of room for the defense.
`
`B. Evidence of HP executives’ post-acquisition reactions to hardware revelations are not
`relevant to the materiality of Autonomy’s misstatements.
`
`Framed by these precedents, the post-acquisition reactions of HP executives such as Cathie
`Lesjak and Manish Sarin are not relevant to the materiality of Autonomy’s falsehoods. See Mot. at 4-5.
`Indeed, the Court rejected a similar argument for adducing this evidence in Hussain: “Allowing the
`defense to argue that HP did not react to the news of hardware sales with sufficient surprise . . . would
`have produced a mini-trial on the issue of what HP learned when, how it reacted, and why[.]” Hussain
`New Trial Order at 64:5-9. Just so here. What’s more, the record shows that the evidence proffered by
`Lynch would not lead to the inferences claimed.
`Take Sarin, for example: Lynch wants to introduce a November 2011 e-mail thread between
`Sarin and an HP employee named Kathryn Harvey. See Mot. at 5:6-13. In the thread, Harvey tells Sarin
`that she “just learned” that Autonomy had “approx. $100M/ year in revenue coming from the sale of
`Dell HW products.” Id. (quoting Trial Ex. 2451). Lynch now claims that Sarin “expressed no surprise or
`concern” at this e-mail, Mot. at 5:10, but overlooks the fact that Sarin’s response proves that he did not
`know about Autonomy’s naked hardware resales. See Declaration of Zachary G.F. Abrahamson in
`Support of the United States’ Opposition to Defendant Lynch’s Motion in Limine re: Post-Acquisition
`Evidence (filed herewith), Ex. A (Trial Ex. 2451) (“[Autonomy is] a predominantly software company
`with little to no services or hardware.”) (emphasis added). Indeed, the Court drew this “contrary”
`inference from Sarin’s response when the issue arose in Hussain: “This [e-mail] does not suggest that
`Sarin ‘knew the truth’ about the hardware sales—indeed, it suggests the contrary.” Hussain New Trial
`Order at 63:21-22 (emphasis added).
`Lynch’s proffer regarding Lesjak’s reaction is weaker still. Lesjak was less involved than Sarin
`
`U.S. OPP. TO LYNCH MIL RE
`POST-ACQ EVIDENCE, CASE NO. CR 18-577 CRB 5
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`in HP’s diligence of and negotiation with Autonomy, later testifying that HP’s mergers team at the time
`reported up to Chief Technology Officer Shane Robison—not to Lesjak. Hussain Trial Tr. at 5577:18-
`25. So any inference about materiality that Lynch wants to take from Lesjak’s understandings of
`Autonomy is attenuated and would be subject to questions of whether—and, if so, to whom—Lesjak
`conveyed her pre-acquisition understandings about Autonomy. As for the specific document that Lynch
`brandishes as evidence that Lesjak knew about hardware, the record is clear and does not support Lynch:
`In mid-November 2011, Ernst & Young sent HP a four-page PowerPoint deck (“Q4 EY CFO Session”)
`covering various business units within HP that included as one of four bullets on Autonomy, “Revenue
`includes $115M of hardware.” See Abrahamson Decl., Ex. B. That was it. The deck did not explain the
`source of the “hardware” revenue, its customer composition, or the fact that Autonomy made those sales
`at a loss. Id. So Lesjak—as she later told investigators in 2014—assumed that the comment referred to
`appliances (roughly, hardware preloaded with software and intended for use primarily with that
`software). See Abrahamson Decl., Ex. C at 10 (Report of Interview of Catherine Lesjak). Naked
`hardware resales, Lesjak told investigators, would have raised concerns—and did, when Lesjak learned
`of them through Joel Scott’s May 2012 disclosures. So the November 2011 [Ernst& Young] “CFO
`update” hardly changes the picture on the materiality of Autonomy’s lies. It should be excluded.
`
`C. Evidence of HP’s post-acquisition valuations of Autonomy is not relevant to materiality
`and should be excluded under Rule 403.
`
`Lynch claims that post-acquisition valuations of Autonomy—including valuations that HP
`prepared and valuations that others did on HP’s behalf—support an inference that “the accounting
`irregularities were either known to HP, and/or were not material to HP.” Mot. at 6:16-22 (emphasis
`added). But as this Court knows, that’s not the point—and anyway, the valuations do not support that
`inference. They should be excluded under Rule 403.
`HP’s post-acquisition valuations do not produce the clean inference that Lynch submits and so
`would lengthen the trial and confuse jurors. For example, Lynch’s motion claims that one of HP’s post-
`acquisition valuations pegged Autonomy’s worth at $13.7 billion. Because $13.7 billion exceeds
`Autonomy’s sale price, Lynch argues, the valuation shows that Autonomy’s fraud was immaterial. See
`Mot. at 5:25-6:4. But Lynch is comparing apples and oranges: HP had valued Autonomy pre-acquisition
`
`U.S. OPP. TO LYNCH MIL RE
`POST-ACQ EVIDENCE, CASE NO. CR 18-577 CRB 6
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`Case 3:18-cr-00577-CRB Document 314 Filed 02/01/24 Page 7 of 13
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`at $17 billion—more than $3 billion over what the company thought Autonomy was worth once it
`started to investigate Lynch’s fraud.2 See Abrahamson Decl., Ex. C at 4. More to the point for this
`motion, introducing HP’s post-acquisition valuations of Autonomy will require testimony from their
`creators about (at least) the scope of the exercises undertaken, assumptions underlying those exercises,
`and the extent to which market events or other unrelated factors influenced HP’s post-acquisition view
`of Autonomy. Each post-acquisition valuation is its own can of worms and offers limited insight into
`how Autonomy’s misstatements would have influenced an objective acquirer. They should be excluded.
`
`D. Evidence of Ernst & Young’s reaction to HP’s Autonomy write-down is not relevant to
`materiality and should be excluded under Rule 403.
`
`Almost as an afterthought, Lynch asks to introduce evidence of Ernst & Young’s reaction to
`HP’s Autonomy write-down. See Mot. at 6:7-12. The Court should reject that request: The government
`does not plan to introduce evidence of the size of HP’s Autonomy write-down. So the rebuttal value of
`Ernst & Young’s response will be highly attenuated and require the introduction of entirely new events
`just to situate the response for the jury. Nor is the firm’s chosen phrase—“materially impact”—some
`magic password for admitting the memorandum. The accounting definition of “material” differs from
`the definition that this jury will employ when deciding Lynch’s guilt, and introducing competing
`definitions will confuse jurors and require extensive clarifying testimony. The Ernst & Young evidence
`should be excluded.
`
`THE COURT SHOULD EXCLUDE THE IMPROPER “REBUTTAL” EVIDENCE
`THAT LYNCH PROFFERS.
`Beyond the purported “materiality” evidence discussed above, Lynch seeks to admit a kitchen
`sink of so-called “rebut[tal]” evidence about Autonomy’s post-acquisition integration with HP. See Mot.
`at 7-13. That proffered evidence—which ranges from general accusations of mismanagement by HP to
`specific post-acquisition statements by third parties involved in the Autonomy fallout—should be
`
`II.
`
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`2 The Court’s observation in the context of hardware sales is instructive here: “If a reasonable
`buyer in HP’s position would still have acquired Autonomy even if it had known of the hardware sales,
`but would have paid less, then the misrepresentations regarding hardware sales were material.” Hussain
`New Trial Order at 63:2-5 (emphasis added).
`U.S. OPP. TO LYNCH MIL RE
`POST-ACQ EVIDENCE, CASE NO. CR 18-577 CRB 7
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`largely excluded for a host of reasons.3 Most importantly, the government does not intend to introduce
`evidence of the magnitude of HP’s $8.8 billion writedown of Autonomy. So there will be no blame
`regarding a “massive multi-billion-dollar loss,” Mot. at 7:27, for Lynch to rebut.4 Evidence of HP’s
`post-acquisition operational successes or failures, therefore, would only confuse jurors and prolong the
`trial. Below, the government addresses the various categories of evidence that Defendant Lynch
`proffers as his purported “rebut[tal].”
`
`A. The Court Should Exclude Defendant Lynch’s Proffered Evidence of HP’s “Integration
`Failures” in Early 2012.
`
`The first category of so-called “rebut[tal]” evidence that Lynch describes relates to Autonomy’s
`performance in early 2012. See Mot. at 9:1-16. Per Lynch, the company—then operating as a subsidiary
`of HP—underperformed because HP purportedly “failed to execute” a planned integration and bungled
`Autonomy’s sales strategy. Id. This evidence should be excluded.
`First, Lynch’s purported “integration” evidence provides no insight into pre-acquisition facts that
`the jury must find: Lynch does not explain, for example, what inference jurors can draw about Lynch’s
`pre-acquisition intent from the success or failure HP’s Autonomy integration. The same goes for
`Lynch’s purported evidence about HP’s sales strategy.5 Those relevance concerns drove this Court in
`Hussain to exclude evidence about HP’s integration. See Hussain New Trial Order at 66:15-24 (“The
`relevance of this [extrinsic evidence relating to HP’s integration of Autonomy and its failure to properly
`manage other acquisitions] is highly attenuated.”). Indeed, as the Court observed then, “even a
`
`
`3 The government does not object to the admission of a July 2011 pre-acquisition cash flow
`model developed by HP in connection with due diligence. See Mot. at 8:7-24. But the government
`would object to the admission of evidence related to the attempted integration of Autonomy and HP’s
`Vertica division after the deal’s close.
`4 The government may, however, still describe Autonomy as “a Pinto” masquerading as “a
`Cadillac”: Calling juror attention to a pre-acquisition discrepancy—between the story that Autonomy
`provided to HP and the truth at the time—is not the same as introducing the fallout from that
`discrepancy. The Court should not find that the door to post-acquisition evidence has opened whenever
`the government calls attention to the pre-acquisition magnitude of Autonomy’s fraud.
`5 Compounding the problem, Lynch provides no description of what this purported evidence is—
`Lynch’s own testimony, e-mails sent by HP employees, or testimony that Lynch expects to elicit from
`government witnesses. Given that lack of specificity, the government fears that each line of argument
`could necessitate a substantial response in the form of additional witnesses, extended re-direct
`examinations, or new exhibits.
`U.S. OPP. TO LYNCH MIL RE
`POST-ACQ EVIDENCE, CASE NO. CR 18-577 CRB 8
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`successful integration of Autonomy into HP would have been consistent with a finding that Hussain had
`committed fraud.” Id. at 66:23-24. The evidence should be excluded.
`
`B. The Court Should Exclude HP’s Post-Acquisition Valuations of Autonomy.
`
`Evidence of HP’s post-acquisition Autonomy valuations should also be excluded. Lynch
`describes this evidence as “interna[l] conclu[sions] that Autonomy was worth more than what HP had
`recently paid for it,” Mot. at 9:19-20, and alludes elsewhere to valuations “created for HP by its
`consultants and auditors.” Mot. at 5:22-24. As with other evidence proffered by Lynch, his broad-brush
`description of these valuations makes it difficult to assess their evidentiary import. But if Lynch is
`referring to work by Duff & Phelps, Economic Partners, or Ernst & Young, the Court heard this
`argument in Hussain and properly excluded the valuations. See Hussain New Trial Order at 67:13-
`68:12. As the Court said then, the purchase-price accounting prepared by Duff & Phelps and Economic
`Partners “took [Autonomy’s] purchase price for granted in determining how to allocate that price” on
`HP’s books. Id. The consultants “did not claim to reach a conclusion regarding whether the price was a
`fair or ‘correct’ one.” Id. So the post-acquisition valuations have marginal relevance, and would require
`substantial accounting testimony to contextualize and explain. They should be excluded.
`
`C. The Court Should Exclude Defendant Lynch’s Purported “Scapegoat” Evidence, Including
`Evidence of HP’s Fall 2012 Impairment and Write-Down.
`
`The Court should also exclude Lynch’s purported evidence that HP “determined to scapegoat
`Autonomy for its own performance.” Mot. at 9:27-11:6. Lynch does not even attempt to connect this
`evidence to some fact that would be relevant to the jury’s adjudication of Lynch and Chamberlain’s
`fraud. Absent from Lynch’s argument is any explanation of how HP executives’ fall 2012 deliberations
`shed any light on Defendants’ pre-acquisition conduct or state of mind. As stated above, the government
`does not intend to adduce evidence of HP’s write-down—with that line drawn, there is nothing for
`Lynch’s supposed “scapegoat” evidence to rebut. Its introduction will only lengthen the trial and
`confuse the jury.
`//
`
`//
`
`U.S. OPP. TO LYNCH MIL RE
`POST-ACQ EVIDENCE, CASE NO. CR 18-577 CRB 9
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`D. The Court Should Exclude Evidence of HP’s Deliberations About the November 2012
`Write-Down, Including Ernst & Young’s Views Thereon.
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`Lynch also seeks to admit evidence of HP’s November 2012 Autonomy write-down and Ernst &
`Young’s participation therein. The firm, Lynch claims, “disagreed with HP’s stated reason for the write-
`down” and objected to language in an associated press release. Mot. at 11:7-22. Lynch claims that this
`evidence will rebut the government’s description of the Autonomy acquisition as “disastrous,” id. at
`11:23-24, but—as the government has made clear—it has no intention of offering such a description.
`Not only that, the admission of Ernst & Young’s November 2012 memo would open a Pandora’s
`box of evidence and add substantially to the trial. Faced with EY’s memorandum, the government would
`have no choice but to provide the jury with context for how the memorandum came to be and evidence
`about the limits of its scope. Into the trial would come testimony about HP’s decision to write down
`Autonomy, expert opinion about the principles driving such an exercise, and witnesses to testify about
`both the scope of EY’s engagement and the ultimate propriety of the firm’s conclusions—all to prove
`what, exactly, about acts done and statements made between one and three years earlier? The evidence
`about Ernst & Young’s participation in the November 2012 write-down should be excluded.
`
`E. The Court Should Limit Evidence Proffered by Lynch to Impeach the Restatement
`Prepared by Christopher Yelland.
`
`Lynch’s final category of “rebut[tal]” evidence relates to the January 2014 restatement of
`Autonomy Systems Limited’s accounts by Christopher Yelland. See Mot. at 12:6-13:12. Lynch seeks to
`introduce—as did Hussain—evidence that Yelland corresponded with employees of various firms
`involved in the Autonomy investigation while preparing his restatement. The government acknowledges
`that the Court admitted aspects of this evidence during Yelland’s cross-examination in Hussain. But the
`government also notes that the Court ensured that Yelland could provide complete answers about the
`roles that those firms played and the context for their engagement. See, e.g., Hussain Trial Tr. 5195-96
`(Yelland testifying to back-and-forth with Morgan Lewis regarding rights of UK auditor to investigative
`information), 5199-200 (Yelland testifying to specific accounting usage of the term, “error,” as opposed
`to the term, “misstatement”).6 The government respectfully requests that the Court take similar steps to
`
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`6 As the Court later explained after Yelland responded to a question about Autonomy’s 2011
`U.S. OPP. TO LYNCH MIL RE
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`preserve the integrity of Yelland’s testimony here—or permit the government to do so on re-direct.
`Finally, the government notes that the Court in Hussain appropriately cabined this impeachment
`evidence by precluding questions far afield of the restatement’s inputs and mechanics. See, e.g., Hussain
`Trial Tr. 5208:2-19 (sustaining objection to question about civil fraud litigation in UK). The government
`requests the same judicial management of Yelland’s cross-examination here. There will be ample
`disagreement on opinion and facts more directly relevant to the falsity of Autonomy’s representations—
`the Court should keep the scope of restatement-impeachment evidence narrow.
`
`III. THE COURT SHOULD LIMIT THE POST-ACQUISITION EVIDENCE
`PURPORTEDLY RELEVANT TO DEFENDANT LYNCH’S INTENT.
`Lynch’s last category of post-acquisition evidence relates to intent. The first part of this is well-
`trod ground: Lynch seeks to adduce evidence that Autonomy’s books and records went to HP with the
`acquisition. Mot. at 14:1-12. That fact, Lynch says, is inconsistent with the allegation that Lynch
`intended to deceive HP through false accounting and other statements. Id.
`The parties in Hussain dealt with this argument by stipulation: The government agreed that HP
`received Autonomy’s books and records immediately after the deal closed, and Hussain argued from
`that stipulation in closing. See, e.g., Hussain New Trial Order at 64:17-26 (quoting from the defense
`closing in Hussain, “When the deal closed on October 3rd, Hewlett Packard got all the books and
`records of Autonomy and it got the Deloitte work papers and could review them, and those work papers
`and books and records clearly showed—this is the stipulation that says that—clearly showed the
`hardware sales. You couldn't miss it.”). The Court properly observed that admitting those books and
`records themselves “would have required testimony regarding bookkeeping practices and what the
`books did or did not show, further complicating a case that was already plenty complex.” Id. at 65:3-4.
`A parallel stipulation here will save time and avoid juror confusion.
`But Lynch’s second ask for post-acquisition “intent” evidence is more problematic. The
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`accounts, “the reason I'm giving witnesses latitude in explaining, . . . is to enable the jury as the
`testimony comes in to gather -- to have a context and an explanation as to these statements because the
`Court feels that it is essential in this case, which is so -- which is an accounting case in many respects
`and not necessarily the familiar subject of any of us, that they get evidence in the context so that they
`can evaluate it properly.” Hussain Trial Tr. 5222-23.
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`POST-ACQ EVIDENCE, CASE NO. CR 18-577 CRB 11
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`“explan[ations]” previewed by Lynch regarding HP’s integration of Autonomy, Lynch’s termination
`from the company, and corporate politics following the exit of former HP CEO Leo Apotheker simply
`have no bearing on the elements of the frauds alleged.7 Like much of the post-acquisition evidence
`discussed above, admitting Lynch’s testimony about Autonomy’s integration would open so many doors
`that the jury would stay impaneled into June. That’s also true of Lynch’s proffered testimony regarding
`“rumors” that “falsely impugn[ed]” him in the spring of 2012. See Mot. at 14:24-26. Describing those
`rumors, examining their sources, and testing their veracity threatens a goose-chase through multiple
`levels of hearsay and witnesses as-yet-unnamed. Such a digression should be precluded here—where
`what matters is what Lynch knew about Autonomy’s business practices, when he knew it, and what he
`did with that information.
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`Finally, the Court should exclude Lynch’s proffered testimony about HP’s November 2012
`write-down for the reasons given above in connection with other write-down evidence. See Mot. at
`15:12-19. In a nutshell, the government will not open the door to the write-down’s size because loss
`isn’t an element of fraud. See Hussain New Trial Order at at 66:19-24 (“Actual reliance and loss
`causation are not elements of criminal fraud charges[.]”). Accordingly, and in the interest of juror time,
`the Court should preclude Lynch’s proffered testimony about HP’s write-down.
`CONCLUSION
`The Court should deny Defendant Lynch’s motion in limine to admit post-acquisition evidence
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`for the reasons stated above.
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`7 Indeed, Lynch’s proffered explanations about how “Autonomy became essentially an unwanted
`stepchild,” Mot. at 14:19, suggest that Lynch—like Hussain—may “improper[ly] attempt[] to encourage
`the jury to decide [his] guilt by weighing the relative culpability of [the defendant] and HP.” Hussain
`New Trial Order at 60:8-10. The Court should preclude any Defendant’s attempt to do so.
`U.S. OPP. TO LYNCH MIL RE
`POST-ACQ EVIDENCE, CASE NO. CR 18