Administration December 15, 2009

Broadcom Options Backdating Defendants Cleared by Judge

December 15, 2009 (PLANSPONSOR.com) – A federal judge has cleared two former executives of an Irvine, California-based telecommunications firm of charges related to backdating stock options.

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The Wall Street Journal reported that U.S. District Judge Cormac Carney threw out criminal fraud charges against Henry Nicholas III, the co-founder of Broadcom, and William Ruehle, the company’s former chief financial officer.

Carney previously had said he was concerned that a prosecutor in the case had committed misconduct by leaking confidential information to the press and by pressuring witnesses to testify in a manner favorable to the government.

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Carney recently also cleared Henry Samueli, who founded the company along with Nicholas. Samueli last year pleaded guilty to making a false statement to the Securities and Exchange Commission in connection with the agency’s Broadcom backdating investigation, the Journal said. The judge determined that there was not enough evidence to convict Samueli of a crime.

Broadcom restated its earnings in 2007 and recorded $2.2 billion in backdating-related expenses it should have taken when the options were granted between 1998 and 2003, the Journal said.

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