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Broadcom co-founders charged in stock options probe
2008-05-14
Federal officials on Wednesday charged Broadcom Corp. co-founders Henry T. Nicholas III and Henry Samueli with falsifying the company's reported income by illegally backdating stock options for five years. A criminal complaint filed by the Securities and Exchange Commission also charges former chief financial officer William J. Ruehle and general counsel David Dull. The four men are accused of violating federal securities laws by misrepresenting the dates on which stock options were granted to its executives and employees. The SEC said that as a result of the scheme, Broadcom restated its financial results in January 2007 and reported more than $2 billion in additional compensation expenses. "This egregious misconduct resulted in the largest accounting restatement to date arising from stock option backdating and warrants the significant sanctions sought from these individuals," said Linda Chatman Thomsen, director of the SEC's Division of Enforcement. Phone messages left for attorneys representing Nicholas and Samueli were not immediately returned. The Irvine-based communications chip maker agreed last month to pay $12 million to settle similar charges without admitting or denying the allegations.
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