Ex-Autonomy CFO's conviction for Hewlett-Packard fraud is upheld by US appeals court

Credit: REUTERS/© Jim Young / Reuters

By Jonathan Stempel

Aug 26 (Reuters) - A U.S. appeals court on Wednesday upheld former Autonomy Corp Chief Financial Officer Sushovan Hussain's fraud conviction and five-year prison sentence for his role in the $11.1 billion sale of the British software company to Hewlett-Packard in 2011.

The court rejected Hussain's claim that American wire fraud laws did not cover his conduct in Britain, saying the case was based on conference calls, emails and press releases involving people in California, where Hewlett-Packard was based.

It also said jurors could have found that Hussain, 56, defrauded Hewlett-Packard investors by vetting false information about Autonomy's finances and growth prospects that was included in a statement announcing the takeover.

"The jury was entitled to reject Hussain's efforts to minimize the press release and his level of involvement in it," Circuit Judge Daniel Bress wrote for a three-judge panel of the 9th U.S. Circuit Court of Appeals in San Francisco.

Hussain, 56, was convicted in April 2018 on 16 wire fraud, securities fraud and conspiracy counts. He was also fined $4 million and ordered to forfeit $6.1 million.

Lawyers for Hussain did not immediately respond to requests for comment. A spokesman for U.S. Attorney David Anderson in San Francisco did not immediately respond to a similar request.

Prosecutors claimed that Hussain, who moved to England from his native Bangladesh at age 7, used backdated contracts and other accounting fraud to inflate Autonomy's revenue and attract potential buyers.

Hewlett-Packard took an $8.8 billion writedown a year after buying Autonomy.

It is awaiting judgment from a trial completed in January in London's High Court, where it sued Hussain and former Autonomy Chief Executive Mike Lynch for $5 billion in damages.

Lynch, the British technology entrepreneur, submitted himself for arrest in February and could face extradition to California to face criminal charges related to Autonomy. He has denied criminal wrongdoing.

The case is U.S. v Hussain, 9th U.S. Circuit Court of Appeals, No. 19-10168.

(Reporting by Jonathan Stempel in New York; Editing by Bernadette Baum)

((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters Messaging: jon.stempel.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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