SAN FRANCISCOA U.S. federal judge Tuesday (Dec. 15) dismissed securities fraud charges against Broadcom co-founder Henry Nicholas and a former chief financial officer at the fabless chip vendor, citing prosecutor misconduct.
U.S. District Judge Cormac J. Carney also dismissed a pending civil complaint brought by the U.S. Securities and Exchange Commission (SEC) against Nicholas, Broadcom co-founder Henry Samueli and William Ruehle, the fomer CFO, according to a statement circulated by Broadcom (Irvine, Calif.).
Nicholas and Ruehle were facing conspiracy fraud charges stemming from their role in a stock-options backdating scandal that made Broadcom the target of an SEC investigation beginning in 2006. Like dozens of other companies, Broadcom came under scrutiny for historical stock options backdating in the early part of this decade, Broadcom was eventually forced to take $2.2 billion in charges to quarterly financial reports as a consequence of improperly backdated stock options.
Last week, Judge Carney dismissed a guilty plea entered by Samueli on charges that he lied to investigators in connection with the stock options backdating probe. He ruled that Samueli did not make a material false statement to SEC investigators.
On Tuesday, Carney ruled that a prosecutor in the Broadcom case committed misconduct by improperly attempting to intimidate defendants and witnesses, according to Broadcom's statement and various media reports.