BOSTON (Reuters) - A former executive at British software company Autonomy has agreed to become a cooperating witness to resolve U.S. charges that he and others schemed to deceive investors about the firm’s performance before its sale to Hewlett Packard (HPE.N) in 2011.
Christopher Egan, the former chief executive of Autonomy’s U.S. subsidiary, entered into a deferred prosecution agreement in which he also admitted wrongdoing as part of a deal that could lead prosecutors to dismiss a case they filed this week against him.
A copy of the agreement filed in federal court in San Francisco on Tuesday said the deal’s terms were subject to the completion of a related case against former Autonomy Chief Financial Officer Sushovan Hussain.
Egan in November 2016 agreed to pay more than $923,000 to resolve charges by the U.S. Securities and Exchange Commission that he participated in a scheme to inflate Autonomy’s revenue numbers from 2009 to 2011.
“From the day many years ago when concerns were first raised by HP, Christopher has never had any hesitation in coming forward to explain the role he played at Autonomy and forthrightly answer the government’s questions,” Miles Ehrlich, Egan’s lawyer, said in a statement.
A lawyer for Hussain, a UK resident who was Autonomy’s CFO at the time of its $11 billion acquisition by HP, declined to comment. Hussain previously pleaded not guilty to conspiracy and wire fraud charges.
Federal prosecutors brought charges in November 2016 against Hussain, alleging that beginning in 2009, he and others sought to deceive Autonomy’s investors and HP about the company’s performance, financial condition and prospects for growth.
The scheme had several objectives, an indictment said, including to artificially increase and maintain Autonomy’s share price to make the company attractive to potential buyers like HP, which agreed to buy it in 2011.
The deal was supposed to form the central part of HP’s move into software but instead led the U.S. company a year later to write-off three-quarters of Autonomy’s value.
Hewlett Packard Enterprise Co in September completed the spin-off of much of its software business, closing the door on the Autonomy deal. HPE was formed when the company once known as Hewlett-Packard split into HPE and HP Inc (HPQ.N) in November 2015.
Hussain is scheduled to face trial on Jan. 29, according to court records.
HP did not respond to a request for comment on Thursday.
The case is U.S. v. Egan, U.S. District Court, Northern District of California, No. 17-cr-00590.
Reporting by Nate Raymond in Boston; Editing by Cynthia Osterman