SAN FRANCISCOA U.S. federal judge Wednesday (Dec. 9) dismissed a guilty plea entered by Broadcom Corp. co-founder Henry Samueli on charges that he lied to investigators in connection with a stock options backdating probe.
According to reports by the Associated Press
and others, later confirmed by statements from Broadcom and Samueli, U.S. District Judge Cormac J. Carney ruled that Samueli did not make a material false statement to investigators from the U.S. Securities and Exchange Commission (SEC). Samueli will not be prosecuted for anything dealing with his SEC testimony, according to the AP report.
Samueli, 55, had been awaiting sentencing after pleading guilty last year.
Testifying at the trail of former Broadcom Chief Financial Officer William Ruehle, Samueli said that he lied to SEC investigators in 2007 when he told them he wasn't involved in awarding stock options at Broadcom because he didn't think that question through thoroughly, according to the AP report.
Carney had in 2008 rejected a plea agreement that called for Samueli to receive probation.
Scott McGregor, Broadcom president and CEO, said through a statement that he was gratified for the decision. It means that Samueliwho McGregor called "one of the most brilliant minds of his generation"would continue to devote his "extraordinary engineering expertise" to the best interests of Broadcom, its employees, shareholders and others, McGregor said.
In May 2008, Samueli, Broadcom's chairman and chief technology officer, took a leave of absence from the fabless chip vendor pending his legal issues.
Samueli, who with his wife Susan purchased the National Hockey League (NHL)'s Anaheim Ducks in 2005, said through a statement posted on the team's website Wednesday that he was "relieved and thankful" for Carney's decision. Samueli had been temporarily suspended by the NHL last year because of his legal woes until being reinstated last month.
Broadcom was one of dozens of companies that came under scrutiny for historical stock options backdating in the early part of this decade. In January 2007, the company restated earnings for several quarters, including net readjustments of $2.2 billion as a consequence of improperly backdated stock options.
In April 2008, the SEC charged Broadcom with falsifying its reported income by backdating stock option grants over a five-year period. The SEC charged that from June 1998 to May 2003, Broadcom, acting through its top officers, misrepresented the dates on which stock options were granted to executives and employees. Broadcom agreed to settle the charges and pay a $12 million penalty.
In May 2008, the SEC brought charges against Samueli and fellow Broadcom co-founder and former CEO Henry Nicholas, as well as Ruehle and David Dull, formerly the company's general counsel, for allegedly perpetrating a scheme to fraudulently backdate stock option grants.