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.
"Death Is Very Likely The Single Best Invention Of Life" -- Steve Jobs
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
IBM to Offer Watson Supercomputer as Cloud Development Platform
November 14, 2013, 12:00 PM
Microsoft May Use Fuel Cells at Rack Level for Greener, Cheaper Data Centers
November 13, 2013, 3:14 PM
Study: Problems with Surgical Robots Going Unreported to the FDA
November 5, 2013, 2:36 PM
Lenovo CEO Shares Bonus with Workers for a Second Year
September 2, 2013, 11:16 AM
Hacking the Gibson: 24 YO Scored Root on Nation's Top Supercomputers
August 28, 2013, 7:14 PM
Report: Google Kills Employee "20% Time"
August 19, 2013, 10:07 AM
Most Popular Articles
Experts: Masturbation Prevents Cancer, Diabetes, Insomnia, and Depression
December 6, 2013, 2:01 PM
Hackers Nab 2 Million Login Credentials from Facebook, Gmail, Twitter
December 5, 2013, 1:00 PM
Thieves Steal Truck with Cobalt-60 Onboard in Mexico, Will Die "Without a Doubt" from Exposure
December 5, 2013, 12:04 PM
Man Arrested for Using 5 Cents Worth of Electricity to Charge Nissan Leaf at Middle School
December 4, 2013, 8:00 PM
U.S. Navy Fires "XFC" Drone from Underwater Submarine
December 6, 2013, 2:35 PM
Latest Blog Posts
Justice Leaks Details of Next HTC One Two Flagship Phone
Dec 5, 2013, 4:04 PM
Global Cyber Espionage Concerns Reveal Growing Cyber Armies
Nov 29, 2013, 11:04 AM
Is The Period Becoming an Expression of Anger?
Nov 26, 2013, 2:02 PM
NSA and Congress -- You Will Never Kill the Constitution, It's an Idea
Nov 10, 2013, 2:00 PM
AT&T Explores $100B+ USD Deal to Acquire Vodafone's European Operations
Nov 4, 2013, 7:34 AM
More Blog Posts
Copyright 2013 DailyTech LLC. -
Terms, Conditions & Privacy Information