SEC charges current, former Broadcom execs
Securities and Exchange Commission charges two current and two former key executives at the chipmaker with backdating stock options.
The Securities and Exchange Commission has charged two current and two former key executives of chipmaker Broadcom with backdating stock options.
The SEC announced Wednesday it had filed a federal complaint against Chairman and Chief Technology Officer Henry Samueli and general counsel David Dull, as well as former Chief Executive Officer Henry Nicholas and former Chief Financial Officer William Ruehle. The chipmaker later announced that Samueli and Dull had taken leaves of absence from their positions until the matter is resolved.
Samueli, who co-founded the company, also resigned as chairman of the board. The board appointed director John Major to serve as nonexecutive chairman.
Major said Broadcom would not comment on allegations, but pointed out that the charges were "half a decade to nearly a decade" old.
The SEC charges that, from 1998 to 2003, the four schemed to fraudulently backdate stock-option grants, failing to record billions of dollars of compensation expenses, and falsifying documents to further the fraud. As a result of the scheme, Broadcom restated its financial results in January 2007 and reported more than $2 billion in additional compensation expenses, the SEC said.
Ruehle and Dull each personally benefited from the backdating scheme by receiving and exercising backdated grants that were in-the-money by more than $100,000 for Ruehle and $1.8 million for Dull, the SEC said in a statement.
The move follows Broadcom's agreement last month to pay a civil penalty of $12 million to settle SEC charges that it fraudulently backdated stock options.