FBI Probes Possible Criminal Accounting Fraud at HP Unit Autonomy
November 21, 2012 4:02 PM
comment(s) - last by
"Improprieties" may be code-speak for "crimes"
readers are dead on in their commentary. Responding to our report on Hewlett-Packard Comp.'s (
dire earnings guidance
due to accounting "improprieties" at recently acquired Autonomy,
Hewlett and Packard are turning in their graves. These "improprieties" sound like fishy criminal activities to me. How come no one is being held accountable. At the minimum, some fraud charges should be filed and somebody needs to do hard time. There is just no deterrence for things like this to repeat.
That comment proved prophetic as today the
U.S. Federal Bureau of Investigations
, working hand-in-hand with the
U.S. Securities and Exchange Commission
to investigate claims brought to it by HP.
In order for the SEC and FBI to investigate accounting errors, they must typically be criminal in nature and pertain to interstate or international offenses. HP reportedly personally requested the investigation after it was shocked to find out Autonomy had doctored its books in an apparent attempt to inflate its value.
The plan to
buy Autonomy for $10.3B USD
drew much criticism from analysts that argued HP was over-paying by at least twice what the UK enterprise software firm was worth. Léo Apotheker -- obsessed with
reforming HP to resemble his former employer
German enterprise software giant SAP AG (
), who gave him the boot shortly before his pickup by the HP -- ignored these glaring warning signs.
The board also shares some blame for failing to take heed of the warnings, as does new CEO Meg Whitman who completed the final stages of the purchase agreement shortly after taking over the reins after Mr. Apotheker was effectively fired for the second time in two years.
This Autonomy poster seems rather ironic in retrospect, considering the software company is alleged to have duped HP out of billions via bad accounting. [Image Source: Autonomy]
However, as much as HP failed to practice due diligence, if its side of the story is to be believed, Autonomy's leadership duped it with basically outright lies regarding improperly categorized hardware and other cleverly cooked books. HP estimates $3.8B USD of the $8.8B USD hit it took on the purchase were due to its own misreading of the software company's value, while the majority of it -- $5B USD was due to the possibly criminal "improprieties".
The FBI and SEC have not posted any official press releases confirming the probe, so at this point the only evidence of it are HP's
If Autonomy is indeed probed, it could take some time to investigate the misconduct as one of its two headquarters is located in Cambridge, UK, outside U.S. jurisdiction. Autonomy does have a second joint-headquarters in San Francisco, Calif. Thus far there have been
of any FBI raid on that location, as may later occur, if the reports of the probe are accurate.
This article is over a month old, voting and posting comments is disabled
11/21/2012 5:39:25 PM
I wonder if Léo Apotheker could (deservedly) end up in jail ...
11/22/2012 5:04:11 PM
Why just him? Why not every person on the Board of Directors who voted in favour of buying Autonomy? As far as I can tell there was enough evidence available to raise questions about the wisdom of paying $10B for Autonomy.
"I f***ing cannot play Halo 2 multiplayer. I cannot do it." -- Bungie Technical Lead Chris Butcher
HP Posts Horrific Guidance, Will Take $8.8B USD Hit on "Improprieties"
November 20, 2012, 9:27 AM
IDF 2011 Exclusive: HP Discusses Spinoff Details
September 14, 2011, 5:10 PM
HP Looks to Dispose of TouchPads by Any Means Possible
August 19, 2011, 11:08 AM
Google's Gleaming Glass HQ Gets Mountain View Snub, LinkedIn Gets the Love
May 7, 2015, 6:58 AM
Tech's Tax Day Fortunate Few: Qualcomm, Xerox, GE, et al. Pay Little or No Taxes
April 15, 2015, 11:30 AM
LinkNYC Terminals to Blanket New York City With Free WiFi, Free Calls, and Ads
November 17, 2014, 6:50 PM
Microsoft is Open-Sourcing Most of .NET, Adding OS X and Linux Support
November 12, 2014, 8:27 PM
Home Depot Lost 53 Million Emails, Blames Windows, Buys Execs New Macs
November 9, 2014, 5:00 PM
Former NSA Lawyer: If Google, Apple Encrypt User Data, They’ll Wither on the Vine Like Blackberry
November 6, 2014, 12:15 PM
Most Popular Articles
Free Windows 10 offer ends July 29th, 2016: 10 Reasons to Upgrade Immediately
July 22, 2016, 9:19 PM
Top 5 Smart Watches
July 21, 2016, 11:48 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2016 DailyTech LLC. -
Terms, Conditions & Privacy Information