December 30, 2009 |
Broadcom Corp. said Tuesday it would pay $160.5 million to settle a securities fraud lawsuit over backdated stock options, an agreement that comes less than three weeks after a federal judge threw out related criminal cases and a government civil action. The resolution marks the third time Broadcom has agreed to pay millions of dollars to settle options-related litigation, but the company cast the development as the beginning of the end for the long-running controversy. "Today's settlement brings Broadcom closer to the day when we can put the stock-option cases behind us once and for all," said Scott McGregor, chief executive of the Irvine microchip company.
December 16, 2009 |
U.S. District Judge Cormac J. Carney's surprising rulings in the Broadcom stock options backdating cases didn't come as much of a shock to some lawyers who have argued cases before him. The judge, a former UCLA football star, isn't afraid to follow his instincts when deciding a case, attorneys say. "He has a strong sense of right and wrong," said Thomas H. Bienert Jr. of the San Clemente firm Bienert, Miller & Katzman. "Judge Carney has shown a willingness to take a strong position outside the norm when he believes it's the just thing to do."
December 16, 2009
Broadcom timeline Stock options, typically used as incentive pay, allow employees to buy stock in the future at current prices. Broadcom Corp. and other companies also backdated the options to a previously lower price to give employees a little extra when they cashed in the options. Backdating was legal as long as the expense was disclosed publicly. Here are events in Broadcom's backdating case: 2006 May 18: A report by the Center for Financial Research and Analysis, representing institutional investors and others, finds Broadcom "at risk" for having backdated option grants during the five-year period that ended in 2002.
October 24, 2009 |
Prosecutors on Friday portrayed a former Broadcom Corp. chief financial officer as a liar who conspired with co-founders Henry T. Nicholas III and Henry Samueli to hide billions of dollars in compensation from regulators and investors in the Irvine technology firm. Rather than reward Broadcom's microchip engineers with high salaries, the former financial executive, William J. Ruehle, schemed for years to improperly backdate stock options, giving them extra value that wasn't acknowledged, because "every dollar you pay is one less dollar on the bottom line," Assistant U.S. Atty.
October 23, 2009 |
Broadcom Corp. said Thursday that third-quarter profit fell 49% and predicted that fourth-quarter sales would be little changed from the previous period, sending the stock down in extended trading. "People were expecting stronger guidance," said Daniel Amir, an analyst at Lazard Capital Markets in San Francisco. Third-quarter net income fell to $84.6 million, or 16 cents a share, from $164.9 million, or 31 cents, a year earlier, Irvine-based Broadcom said. Sales slipped 3.4% to $1.25 billion.
October 1, 2009 |
Federal prosecutors won a key ruling Wednesday in their option-backdating case against Broadcom Corp.'s former finance chief. The 9th U.S. Circuit Court of Appeals in San Francisco ruled that prosecutors could introduce statements that William J. Ruehle, the Irvine chip maker's former chief financial officer, made to company lawyers about the alleged backdating scheme. Ruehle is scheduled to stand trial beginning Oct. 20 in federal court in Santa Ana. The opinion reverses a decision earlier this year by U.S. District Judge Cormac J. Carney, who said the statements to the company lawyers were protected by the attorney-client privilege and could not be admitted as evidence at his trial.