Missing tech tycoon Mike Lynch’s ties to UK spy chiefs

LONDON — It was a freak yachting accident that gripped the world.
And the disappearance of British tech tycoon Mike Lynch in stormy seas off the coast of Sicily was even made stranger by the fact that two days earlier, his business partner Stephen Chamberlain was fatally injured in a car accident.
As long-standing business associates, the pair were tried as co-defendants in a fraud trial over the sale of software company Autonomy to Hewlett-Packard for $11 billion (£7 billion). Following the sale of Autonomy in 2011, Lynch co-founded the cybersecurity firm Darktrace and Chamberlain was appointed chief financial officer.
The Cambridge-based company fights cyberattacks using software that learns the behavioral patterns of every actor within an organization and detects unusual activity.
There is nothing so far to indicate foul play in either man’s respective accidents, which have been put down to a tragic coincidence.
Adding to the intrigue, however, are the business partners’ ties to the worlds of U.K. and U.S. intelligence.
Lynch co-founded Darktrace in partnership with former U.K. intelligence officials in 2013.
One of the co-founders was Stephen Huxter, a high-ranking figure in MI5’s cyber defense team, who became a managing director at Darktrace.
Lynch’s $1 billion VC fund Invoke Capital — set up following the sale of Autonomy — backed the Cambridge University spin-out with an initial investment of £12 million.
Huxter hired 30-year GCHQ veteran Andrew France as the company’s chief executive — he later joined the company’s board. Lynch sat on the board until 2018, when he stepped down after being charged with fraud.
Former head of MI5 Jonathan Evans also sat on the Darktrace’s board for a time, while Jim Penrose, a 17-year veteran of the U.S.’s National Security Agency, formerly headed up the company’s American operations.
Other former spooks at the company included director of technology Dave Palmer, who previously worked at MI5 and GCHQ, and director of security John Richardson, who worked on cyber defence for the UK government.
But Lynch’s connections with the murky sphere of intelligence predated Darktrace. His first company Cambridge Neurodynamics, which specialized in computer-based fingerprint recognition, held contracts with the U.K. intelligence agencies.
“They have the most interesting problems,” he told Wired magazine in 2002.
Lynch spun Autonomy out of Neurodynamics in 1996. The company, which Chamberlain joined in 2005, used machine learning to analyze data from sources such as intercepted phone calls and emails.
A fan of the fictional spy James Bond, Lynch named conference rooms in Autonomy’s headquarters after the movie series’ villains including Dr. No and Goldfinger. He was said to have had a fish tank in the firm’s reception area filled with vicious piranhas, as a tribute to a scene in the movie “You Only Live Twice.”
Autonomy also scored high-profile tenders from U.K. and U.S. government agencies, including a contract to provide infrastructure to the U.S. Office of Homeland Security to analyze intelligence as part of the war on terrorism following 9/11.
A 2003 Guardian article described the company as “dealing with secret intelligence” and “among the few UK commercial organizations that stand to profit from the Iraq war.” It described the company’s technology as “advanced computer eavesdropping systems.”
At that time, the company held other contracts with U.S. government agencies including the army, NASA, and US intelligence agencies. GCHQ and MI6 were also believed to be clients.
Richard Perle, a former Pentagon appointee who at that time served as chair of the Pentagon’s defense advisory board, acted as one of the company’s directors.
A year after the sale of Autonomy, HP claimed that the firm’s value had been exaggerated. In 2018, U.S. prosecutors brought charges against Lynch and he was extradited to the U.S. to face trial in 2022.
The company’s chief financial officer, Sushovan Hussain, was convicted of fraud in 2018 and later sentenced to five years in prison.
However, Lynch unexpectedly escaped conviction on the basis that he focused on the company’s tech and had little knowledge of its finances. He put his escape down to being wealthy enough to afford the legal fees involved in fighting the case in the U.S. courts. He was represented by the same defense lawyer as the disgraced late pedophile Jeffrey Epstein.
In April, Darktrace agreed to a $5.3 billion (£4.2 billion) takeover by the U.S. private equity firm Thoma Bravo.
Searches for survivors from the yacht accident are ongoing. Lynch’s 18-year-old daughter, Hannah, Morgan Stanley International Bank chair Jonathan Bloomer, and Clifford Chance lawyer Chris Morvillo, are also among those missing.
“We do not exclude that they are not inside the boat, but we know the boat sank quickly,” said Vincenzo Zagarola, a spokesperson for the Italian coastguard on Tuesday. “We suppose that the six people missing may not have had time to get out.”