Broadcom Executive's Guilty Plea in Stock Options Fraud Probe Dismissed
December 8, 2009
Santa Ana – US Federal District Judge Cormac J. Corney has dismissed the guilty plea by Broadcom executive Henry Samueli who was accused of lying during the investigations of the stock options backdating.
The judge said Samueli did not “make a material false statements” to the Securities and Exchange Commission (SEC) and thus will not be prosecuted for his testimony as part of a larger probe into the stock option backdating at Broadcom.
Samueli had testified as defense witness in the fraud trial of former Broadcom Chief financial Officer William Ruehle and was granted immunity to testify. He said he lied to investigators in 2007 and told them he was not involved in awarding stock options at Broadcom.
He added that he entered the guilty plea under pressure in the hope of avoiding a massive indictment.
Ruehle and Broadcom co-founder Henry T. Nicholas were both accused of conspiracy and securities fraud who both pleaded not guilty.
Backdating is legal business practice if reported to shareholders. However the law does not allow companies to exaggerate or overstate profits and underpay taxes, which can diminish shareholder value.
Samueli's attorney Gordon Greenberg said he believes the judge has cleared his client from any charges related to the backdating probe.