Bloomberg News

Autonomy’s Lynch Said to Hire Lawyer Weingarten, CFO Gets Keker

March 06, 2013

Mike Lynch, former chief executive officer at Hewlett-Packard Co. (HPQ:US)’s Autonomy unit, hired criminal defense lawyer Reid Weingarten and Sushovan Hussain, who was Autonomy’s finance chief, retained attorney John Keker, according to a person familiar with the matter.

Hewlett-Packard said in December that the U.S. Justice Department had opened an investigation into the company’s allegations that British software maker Autonomy misrepresented its performance before being bought last year. The largest personal computer maker booked an $8.8 billion writedown related to Autonomy in November after concluding that some revenue had been recorded prematurely or improperly.

``As with anyone accused of wrongdoing under the securities laws, these men look like they are retaining highly qualified legal counsel,'' said Lynn E. Turner, a former U.S. Securities and Exchange Commission chief accountant who is now a managing director of the consulting firm LitiNomics Inc. ``I don't believe that says anything one way or another with respect to the allegations.''

Weingarten’s past clients include ex-WorldCom Inc. Chairman Bernard Ebbers and Goldman Sachs Group Inc. (GS:US) Chief Executive Officer Lloyd C. Blankfein. Keker, who is helping McGraw-Hill Cos. and its Standard & Poor’s unit fight U.S. fraud claims, also represented Black Panther Party leader Eldridge Cleaver and banned cyclist Lance Armstrong, as well as vindicated investment banker Frank Quattrone, Enron Corp. executive Andrew Fastow and class-action lawyer William Lerach.

Lynch Cooperation

Lynch said in December that he will cooperate with any investigation and rejected allegations of wrongdoing.

Weingarten, a partner in the Washington office of Steptoe & Johnson LLP, and Keker, a founding partner of Keker & Van Nest LLP in San Francisco, didn’t immediately return phone messages seeking comment. The person asked not to be named because the matter isn’t public. The hiring of the lawyers was reported earlier by the U.K.’s Daily Mail.

Separately, PGGM Vermogensbeheer BV, a Dutch pension administrator, was appointed lead plaintiff in investor lawsuits against Hewlett-Packard over the Automony writedown.

U.S. District Judge Charles Breyer in San Francisco consolidated securities class action, or group, lawsuits against the computer maker in an order March 4. PGGM, with $35.1 million in losses from the drop in HP’s stock after the writedown was disclosed, has the largest financial interest in the litigation, Breyer ruled.

Hewlett-Packard agreed to buy Autonomy for $10.3 billion in 2011. More than $5 billion of the writedown was the result of accounting practices at Autonomy, Hewlett-Packard said. About $200 million of Autonomy’s revenue had been recorded prematurely or improperly, the company’s general counsel said.

Dozen Lawsuits

Shares of Palo Alto, California-based Hewlett-Packard fell 12 percent on the announcement, dropping to the lowest since October 2002. At least a dozen investor lawsuits were filed against the company, its managers and Autonomy managers alleging shareholders were misled about problems with the acquisition.

Bernstein Litowitz Berger & Grossmann LLP was named lead counsel in the securities class-action lawsuit. PGGM may propose an alternate law firm to lead the case, Breyer said in his ruling.

Law firms that lead group lawsuits manage and control the single, consolidated case. A new, consolidated complaint will be filed within 60 days, Ramzi Abadou, an attorney for PGGM at Keller Topaz Meltzer & Check LLP, said in a phone interview. He declined to comment further.

Lead Counsel

Individual investor Stanley Morrical was appointed lead plaintiff in the lawsuits against Hewlett-Packard filed by investors on behalf of the company. Burlingame, California-based Cotchett Pitre & McCarthy LLP was named lead counsel for the so- called shareholder derivative lawsuits, Breyer said.

Three lawsuits filed on behalf of participants of Hewlett- Packard’s employee stock-ownership plan were also consolidated. Breyer named New York-based Zamansky & Associates as interim lead counsel of the cases.

The securities class action case is In Re HP Securities Litigation, 12-cv-5980; the derivative case is Riccardi v. Lynch, 12-cv-06003 and the employee case is In Re HP ERISA, 12-06199, all in U.S. District Court, Northern District of California (San Francisco).

To contact the reporters on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net; Aaron Ricadela in San Francisco at aricadela@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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