SAN FRANCISCOFabless semiconductor vendor Broadcom Corp. has agreed in principle to settle for $160.5 million in cash a securities class action litigation pending against the company and some of its current and former officers and directors, the company said Tuesday (Dec. 29).
Under the proposed settlement, the claims against Broadcom and its officers and directors will be dismissed with prejudice, Broadcom (Irvine, Calif.) said. The company said it expects to record the settlement amount as a one-time charge in its fourth quarter financial statement.
The proposed settlement remains subject to the satisfaction of various conditions, including negotiation and execution of a final stipulation of settlement, and approval by the U.S. District Court for the Central District of California, Broadcom said.
The class action, relating to the company's historical stock option accounting practices, was brought on behalf of persons and entities that bought or acquired shares of Broadcom's common stock between July 21, 2005, and July 13, 2006, Broadcom said.
"Today's settlement brings Broadcom closer to the day when we can put the stock option cases behind us once and for all," said Scott McGregor, Broadcom CEO, in a statement.
Broadcom was one of dozens of companies that 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.
Earlier this month, a U.S. District Court judge dismissed related securities fraud charges against Broadcom co-founder Henry Nicholas and William Ruehle, the company's former chief financial officer, citing prosecutor misconduct. The same judge earlier dismissed a guilty plea entered by Broadcom co-founder Henry Samueli on charges that he lied to investigators in connection with the stock options backdating probe.