February 5, 2010 |
The Securities and Exchange Commission on Thursday dropped a stock-options backdating lawsuit against four Broadcom Corp. figures, the latest legal victory for the Irvine chip company. SEC attorney Molly M. White said the commission chose not to pursue the litigation against Broadcom co-founders Henry Samueli and Henry T. Nicholas III and two former executives "after careful consideration" of comments that a judge made about the case at a hearing in January. The lawsuit, filed in 2008 in the Santa Ana federal courthouse, had sought civil penalties against the men for failing to disclose that they had backdated stock-option grants.
January 22, 2010 |
Federal prosecutors are defending the investigation that led to felony options-backdating charges pending against former KB Home Chief Executive Bruce Karatz. In a motion filed in federal court in Los Angeles, the prosecutors accused Karatz of making baseless allegations of prosecutorial misconduct in order to block damaging testimony against him at his trial set for next month. Two weeks ago, defense attorneys filed a motion accusing prosecutors of intimidating two former KB Home employees who now say Karatz changed the dates of stock option grants to enrich himself and others without accounting for them in regulatory filings.
January 7, 2010 |
Launching a prosecutorial misconduct defense that was effective for Broadcom Corp. executives, former KB Home Chief Executive Bruce Karatz has accused federal prosecutors of manipulating witnesses in his upcoming option-backdating trial. In a motion filed this week in federal court in Los Angeles, Karatz's attorney said two former KB Home employees who once supported Karatz later changed their accounts after meeting with federal prosecutors and FBI agents. The attorney cited the change as an indication of prosecutorial misconduct.
January 6, 2010 |
Cleared last month of criminal wrongdoing by a federal judge, Broadcom Corp. co-founder Henry Samueli has returned to the Irvine chip designer as senior vice president and chief technical officer, a company spokesman said Tuesday. Samueli, who founded Broadcom in 1991 with friend Henry T. Nicholas III, resumed his former positions in December after a federal judge threw out his guilty plea in a stock- option backdating case, said Bob Marsocci, Broadcom's vice president for corporate communications.
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 19, 2009
The Justice Department's crackdown on stock-option backdating took a thunderous hit this month when U.S. District Judge Cormac J. Carney dismissed charges against three former Broadcom executives -- only one of whom was on trial at the time. The judge was so upset with the prosecutors' behavior, he even dismissed the Securities and Exchange Commission's lawsuit against the company. Carney's accusations of witness intimidation and tampering are serious enough to warrant an internal investigation by the Justice Department, and one is underway.
December 17, 2009 |
The stunning dismissals of criminal cases against three former Broadcom Corp. executives in the last week focused on what the judge called "shameful" misconduct by prosecutors. But at the core, he had something more telling to say: Prosecutors couldn't prove the defendants did anything wrong. The Broadcom cases, among others, illustrate the struggles the U.S. attorney's office has encountered in prosecuting corporate executives for backdating stock options, a practice that makes it appear that their companies had fewer expenses and greater income than they really had. Among the most elusive elements in such cases, lawyers said, is proof that executives intended to commit a crime by backdating the options and conceal their actions.
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.
December 16, 2009 |
Accusing prosecutors of a "shameful" campaign to intimidate witnesses and obtain unjustified convictions, a federal judge threw out high-profile criminal stock fraud charges against Broadcom Corp. co-founder Henry T. Nicholas III and the company's former chief financial officer. U.S. District Judge Cormac J. Carney issued his ruling Tuesday, less than a week after he overturned a guilty plea by company co-founder and Anaheim Ducks owner Henry Samueli. The judge also dismissed a civil lawsuit that the Securities and Exchange Commission had filed against Broadcom executives, wiping away misconduct allegations that had plagued the Irvine-based microchip giant for years.
December 11, 2009 |
Testimony concluded Thursday in the criminal trial of Broadcom Corp.'s former Chief Financial Officer William J. Ruehle, who is accused of conspiring to hide billions of dollars in compensation paid to the Irvine chip developer's employees. U.S. District Judge Cormac J. Carney instructed jurors to return to his Santa Ana courtroom Dec. 17 for closing arguments. The judge scheduled a Tuesday hearing to consider a defense motion to dismiss the case against Ruehle for insufficient evidence.