UK accounting watchdog bans Autonomy CFO jailed over fraud

UK accounting watchdog bans Autonomy CFO jailed over fraud

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The UK accounting watchdog has hit Autonomy’s former finance chief Sushovan Hussain with a £450,000 bill and banned him from working in Britain’s accounting industry for two decades following “admissions of misconduct” relating to a 2018 fraud conviction.

The Financial Reporting Council said on Thursday that it had agreed a settlement with Hussain, who was sentenced to five years in prison in the US in 2019 for accounting fraud linked to the $11bn sale of the software company to Hewlett-Packard.

The regulator said that Hussain, a British citizen, agreed to pay £450,000 to cover the costs of its investigation and was handed a ban from the accountancy profession in the UK until November 2038.

“The long period of exclusion reflects the seriousness of the misconduct as evidenced by the fraud offences under the US criminal conviction,” the FRC said. “The misconduct seriously undermines public confidence in the standards of conduct of members and has brought discredit to the accountancy profession.”

Hussain’s ban comes a month after the acquittal of Mike Lynch, Autonomy’s former chief executive, by a jury in San Francisco, ending a 12-year legal battle. Lynch, once one of the UK’s leading tech entrepreneurs, was accused of falsely inflating Autonomy’s revenues ahead of its sale to HP.

However, Hussain was previously convicted in the US on 16 counts of wire and securities fraud. A court in San Francisco found in 2018 that he had made false statements to investors about Autonomy’s performance ahead of the 2011 sale, which subsequently saw HP write down the value of its acquisition by $8.8bn.

At the time, Hussain was also fined $4mn, while the judge in the case set the forfeiture payment at $6.1mn, the gain he personally made as a result of the premium paid by HP for Autonomy.

The FRC said that in light of the extensive financial penalties previously imposed on Hussain, the regulator’s executive counsel did not consider it “appropriate or necessary” to impose any further financial sanctions on him, other than paying costs of £450,000.

The FRC said Hussain’s conviction in the US was “conclusive evidence of misconduct” regarding a member of the Institute of Chartered Accountants in England and Wales (ICAEW).

“Mr Hussain accepts that the US criminal conviction therefore amounts to misconduct, and further accepts that such conduct is in breach of the fundamental principle of the ICAEW code of ethics to act with integrity,” the FRC said.

Hussain, who signed the settlement agreement with the FRC on January 15 of this year, could not immediately be reached for comment. He was released from jail in January after serving his sentence.