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Compliance lessons from the HP-Autonomy fiasco

Tom Fox | March 3, 2018

One of the greatest corporate disasters, to say the least, over the last few years was the acquisition of Autonomy by Hewlett-Packard.

H-P bought the company in 2011 for $11.1 billion and within one year wrote off $5 billion off the investment. How could one of the most successful technology companies make such a colossal mistake?

H-P and U.S. prosecutors claim that Autonomy executives intentionally inflated the company’s profit and loss statements in a manner that  materially misstated the company’s value for a multi-year period. Former Autonomy executives claim that HP simply mismanaged the entire transaction and integration after the acquisition closed. It did not help that the HP chief executive officer who championed the deal, Leo Apotheker, was fired after agreeing to the deal but before the transaction was closed. The next CEO, Meg Whitman, went ahead with the closing even though she was dead set against the deal.

Currently, a criminal trial is ongoing...

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