Sushovan Hussain was convicted of one count of conspiracy, 14 counts of wire fraud and one count of securities fraud following a two-month trial in the San Francisco federal court.

The evidence at trial demonstrated that for more than two years prior to the 2011 sale, Hussain falsely inflated revenues to make it appear Autonomy was growing when it was not. Specifically, Hussain used backdated contracts, roundtrips, channel stuffing, and other forms of accounting fraud to inflate Autonomy’s publicly-reported revenues by as much as 14.6% in 2009, 17.9% in 2010, 21.5% in the first quarter of 2011, and 12.4% in the second quarter of 2011, court documents show. 

In addition, Hussain, and his co-conspirators, fraudulently concealed from investors and market analysts the scale of Autonomy’s hardware sales, which were used to boost the company’s reported top-line revenue. 

Autonomy’s total revenues included re-sold hardware of approximately $53.3m in 2009, $99.08m in 2010, $20.09m in the first quarter of 2011, and $20.85m in the second quarter of 2011. The evidence at trial demonstrated that Hussain falsely suggested to Autonomy investors and analysts that the loss-generating hardware revenue was really high-margin software revenue.

Acting US attorney Alex Tse said: ‘From 2009 to 2011, Sushovan Hussain misused his special skills in accounting to falsely inflate Autonomy’s revenues. The defendant then touted Autonomy’s false and misleading financial statements to senior executives at Hewlett-Packard Company, and eventually defrauded HP of over $11.7bn.’ 

Hussain is due in court on 4 May for sentencing. He faces a maximum sentence of 20 years in prison, and a fine of $250,000, plus restitution, for the conspiracy count and each of the wire fraud counts, and a maximum sentence of 25 years in prison, and a fine of $250,000, plus restitution, for the securities fraud count.

John Keker, Hussain’s lawyer, said the conviction would be appealed and stated: ‘Mr Hussain defrauded no one and acted at all times with the highest standards of honesty, integrity and competence.’

HP, now known as HP Enterprise, was forced to write down $8.8bn of the amount it paid for Autonomy a year after the deal, saying it had discovered a fraud designed to inflate the value of the business. Of this total $5bn related to alleged accounting irregularities and alleged misrepresentation of how software rental and acquisitions were shown.

The company welcomed the verdict and said: ‘As we have consistently maintained, Mr Hussain engaged in outright fraud and deliberately misled the market about non-existent sales through a series of calculated sham transactions.

‘Autonomy manipulated their revenue, and quarterly results, making an accurate valuation impossible. That Mr Hussain attempted to depict the fraud as nothing more than a misunderstanding of international accounting rules was, and still remains, patently ridiculous – and the jury has now held him accountable for his role in defrauding HP.’

Autonomy’s founder and former chief executive Mike Lynch has been engaged in a war of words and legal actions over the claims and has accused HP making up the fraud claim to hide its mismanagement of the business.

Lynch and HPE are due in the High Court in the next few months with both sides making claims and counter claims. HPE is asking for 5.1bn in damages from Lynch and Hussain, while Lynch is countersuing over lost investment opportunities and reputational damage.

Report by Pat Sweet