Due diligence in M&A

“H-P Deal Leads to Indictment,” The Wall Street Journal, November 12, 2016 B4.  Autonomy’s former CFO indicted for fraud in the sale of the company to Hewlitt-Packard.

This was fairly bog-standard alleged fraud, albeit on a much grander scale (nearly $9 billion).  Follows a $100 million payment by H-P to some of its shareholders.

Is this a value-of-information case or a value-of-compliance case (for Autonomy)?  Or just poor due diligence by H-P?  How did Autonomy’s board miss this?  How did H-P (and it’s lawyers and investment advisers) miss this, pre-acquisition?  Might this be worthy of another post- Caremark decision on negligent oversight?  If not, what will it take to hold a board liable for failing to meet its fiduciary duties?

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Filed under Accuracy, Board, Collect, Communicate, Compliance, Compliance, Compliance, Compliance Verification, Controls, Corporation, Data quality, Directors, Duty, Duty of Care, Employees, Governance, Inform market, Inform shareholders, Information, Internal controls, Management, Oversight, Oversight, Protect, Protect assets, Protect information assets, Reliance, Third parties, Value, Vendors

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