Around the turn of the century, Autonomy Corporation was one of the darlings of the UK technology industry, specializing in knowledge management and enterprise search. It went on an acquisition spree in the early 2000s, driving up its revenue, before being swallowed itself by Hewlett-Packard in 2011, in a deal that valued it at over $10 billion.\n\nBut this rags-to-riches tale doesn\u2019t have a happy ending.\n\nIn fact, the HP acquisition of Autonomy probably ranks among the most notorious failed mergers and acquisitions.\n\nNo sooner had the acquisition closed than revenue began to flag, prompting an internal investigation in which HP uncovered signs of past creative accounting at Autonomy. Rather than selling software to customers, HP said, Autonomy had been selling them hardware at a loss, then booking the sales as software licensing revenue.\n\nThat discovery forced HP to write down the value of Autonomy by more than $5 billion, triggering a wave of shareholder lawsuits. HP in turn sued (then former) Autonomy CEO Mike Lynch, and the U.S. Department of Justice launched a criminal investigation.\n\nLast we heard, Lynch was in the UK, facing extradition to the US.\n\nHere\u2019s how it played out.\n\nThe 1990s: Founding myth\n\n1990: Mike Lynch, an academic in Cambridge, England, borrows\u2014or so the legend goes\u2014\u00a32,000 to start Cambridge Neurodynamics, going on to develop the software that would later give rise to Autonomy. However, Companies House, the UK register of commerce, has no record of such a company, and it\u2019s not until 1997 that Lynch creates another company, called simply Neurodynamics.\n\n1996: Lynch sets up Autonomy Corporation in the UK. Its Agentware internet search tools are used by enterprises including Barclays Bank and Unilever and sold as shrink-wrapped software through retail outlets.\n\nJuly 1998: Autonomy\u2019s IPO on EASDAQ values the company at $165 million.\n\nThe 2000s: Spending spree\n\nSeptember 2003: Autonomy completes its purchase of video management software vendor Virage and rebuilds the company\u2019s software on its own IDOL (Intelligent Data Operating Layer) unstructured data management platform.\n\nMarch 2004: Autonomy acquires NativeMinds and Cardiff Software.\n\nNovember 2005: Autonomy agrees to buy search technology developer Verity for $500 milllion, its third acquisition of the year after NCorp (in February) and etalk (in June).\n\nMay 2007: Autonomy spins off its Blinkx consumer software unit in an IPO.\n\nJuly 2007: Autonomy pays $375 million for content archiving and electronic discovery specialist Zantaz.\n\nOctober 2007: Autonomy acquires data management specialist Meridio for \u00a320 million.\n\nJanuary 2009: Autonomy buys enterprise content management vendor Interwoven for $775 million.\n\nJune 2010: Autonomy acquires CA Technologies\u2019 information governance business.\n\nThe 2010s: Autonomy\u2019s unravelling\n\nSeptember 2010: Ex-SAP CEO L\u00e9o Apotheker is named CEO of HP.\n\nMarch 2010: Apotheker says he wants to transform HP from a hardware producer to a software and services provider.\n\nMay 2011: Autonomy sneaks in one last acquisition, of online backup service Iron Mountain Digital, for $380 million.\n\nJuly 2011: Apotheker and Lynch reach a deal to sell Autonomy to HP, and HP begins its due-diligence examination of Autonomy\u2019s finances. Lynch\u2019s lawyers will later claim that HP executives spent just six hours in conference calls with his team.\n\nAugust 2011: HP agrees to acquire Autonomy for $42.11 per share, a premium of around 60% over the market price.\n\nSeptember 2011: HP fires Apotheker, naming Meg Whitman CEO.\n\nOctober 2011: HP buys 87.34% of Autonomy for \u00a35.44 billion, valuing the company at $10.3 billion at 2011 exchange rates\u2014although later reports will put the price as high as \u00a38.7 billion or $11.7 billion.\n\nMay 2012: A senior member of HP\u2019s Autonomy unit raises concerns about Autonomy\u2019s accounting practices. Whitman hires PricewaterhouseCoopers to investigate. Meanwhile, Whitman announces the lay-off of 27,000 HP workers to cut costs. Lynch is among them, for \u201cfailure to meet agreed performance goals, including financial metrics.\u201d\n\nNovember 2012: HP takes an $8.8 billion impairment charge, linking more than $5 billion of it to serious accounting improprieties, misrepresentation, and disclosure failures at Autonomy discovered by an internal investigation by HP and forensic review of Autonomy\u2019s accounting practices prior to its acquisition. HP alleges that the misrepresentations included selling low-end hardware at a loss and recording the transactions\u2014said to account for up to 15% of Autonomy\u2019s total revenue\u2014as licenses for Autonomy\u2019s IDOL software.\n\nDecember 2012: HP says it is cooperating with the Department of Justice, the Securities and Exchange Commission and the UK\u2019s Serious Fraud Office in an investigation relating to Autonomy.\n\nFebruary 2014: HP Autonomy breaks IDOL into discrete services.\n\nJune 2014: HP agrees to settle shareholder lawsuits. The plaintiffs agree to assist HP in bringing claims against Lynch and Hussain, and HP agrees to beef up its due-diligence process for evaluating acquisitions. Claims against HP executives will be dropped.\n\nJanuary 2015: The UK\u2019s Serious Fraud Office calls off its investigation of Autonomy, saying it has \u201cinsufficient evidence for a realistic prospect of conviction.\u201d This is hardly a surprise as the SFO has a reputation for failing to secure convictions.\n\nMarch 2015: With the criminal investigation over, HP begins a civil case, suing Mike Lynch for $5.1 billion in the UK\u2019s High Court alleging that Lynch inflated Autonomy\u2019s revenues by $700 million.\n\nJune 2015: Hewlett-Packard Co. reaches a final settlement with PGGM Vermogensbeheer BV, the lead plaintiff in a securities class action brought over the $8.8 billion impairment charge relating to the company\u2019s acquisition of Autonomy. Hewlett-Packard\u2019s insurance will pay out $100 million to those who purchased HP shares between Aug. 19, 2011, and Nov. 20, 2012, releasing HP and its executives from any Autonomy-related securities claims.\n\nNovember 2015: Hewlett-Packard separates into two companies, with Hewlett Packard Enterprise (HPE) selling enterprise services and servers, and HP Inc. (HPI) selling printers and PCs. HPE assumes responsibility for the Autonomy litigation, agreeing to split any damages awarded with HPI.\n\nMay 2016: HPE sells its IT services business to CSC, forming DXC Technologies. OpenText buys HP TeamSite, a customer experience management platform developed at Interwoven before its acquisition by Autonomy, renaming it OpenText TeamSite.\n\nSeptember 2016: HPE sells software assets including remnants of the Autonomy business to Micro Focus, IDOL among them.\n\nNovember 2016: A federal grand jury returns a criminal indictment against Sushovan Hussain, Autonomy\u2019s former CFO. The grand jury alleges that Hussain, together with others, conspired to engage in a fraudulent scheme to deceive purchasers and sellers of Autonomy securities and HP about the true performance of Autonomy\u2019s business, financial condition, and prospects for growth. Hussain and others made false and misleading statements to, among others, regulators, and market analysts. The indictment alleges that HP relied on the accuracy and truthfulness of the statements and disclosures when considering whether to buy Autonomy and at what price.\n\nSeptember 2017: HPE finally sells its software business, of which Autonomy assets make up a small part, to UK-based Micro Focus International. HPE receives $2.5 billion in cash from Micro Focus, while its shareholders receive Micro Focus shares worth around $6.3 billion.\n\nApril 2018: The federal grand jury finds Hussain guilty. He appeals.\n\nNovember 2018: A federal grand jury indicts Mike Lynch with conspiracy to commit wire fraud and multiple counts of wire fraud, saying that he provided HP with materially false and misleading financial statements for Autonomy while HP was considering the acquisition.\n\nNovember 2019: The federal jury adds a new charge of securities fraud, with a maximum prison sentence of 25 years, to its indictment of Mike Lynch.\n\nDecember 2019: The US asks the UK to extradite Mike Lynch to face charges of securities fraud, wire fraud and conspiracy.\n\nThe 2020s: Resolution\n\nAugust 2020: A US appeals court upholds former Autonomy CFO Sushovan Hussain\u2019s fraud conviction and five-year prison sentence on 14 counts of wire fraud and one of securities fraud for falsely inflating Autonomy\u2019s revenue.\n\nSeptember 2020: The UK\u2019s Financial Reporting Council fines Deloitte \u00a315 million for failings in its auditing of Autonomy\u2019s accounts between January 2009 and June 2011. At issue were Autonomy\u2019s sales of hardware and its sales of software licenses to value-added resellers rather than to end customers.\n\nJanuary 2022: The UK\u2019s High Court rules on the HP civil suit, finding that Mike Lynch had fraudulently inflated Autonomy\u2019s value by misleading HP about its performance. Later the same day, the UK\u2019s home secretary approves Lynch\u2019s extradition to the US to face the grand jury\u2019s charges.