Broadcom cofounder pleads guilty to lying to SEC
- 24 June, 2008 12:51
The former chairman, chief technology officer and cofounder of Broadcom admitted that he lied to the U.S. Securities and Exchange Commission and agreed to pay more than US$12 million for doing so.
In a plea agreement filed Monday in the U.S. District Court for the Central District of California, Henry Samueli agreed to pay the US$12 million plus a US$250,000 fine and serve five years of probation without any occupation restrictions.
Samueli admitted to lying after the emergence of e-mails proving that he did so. During the SEC's investigation last year into Broadcom's practice of backdating stock options, Samueli denied having been involved in granting stock to executives. However, in e-mail messages included in the court filing, he instructs Broadcom's former human resources vice president on a specific date to grant the options.
The court must still approve the plea deal.
Samueli is the latest former Broadcom executive to be involved in a high-profile legal case. Another cofounder, Henry Nicholas, was recently indicted on charges related to backdating stocks as well as possession and distribution of drugs. The suit alleges that Nicholas put ecstasy in the drinks of industry executives and maintained a warehouse where he stored drugs. He is also accused of lying to the SEC about the stock backdating.
Samueli and David Dull, who is general counsel to Broadcom and was also named in the SEC complaint, have taken leaves of absence as executives at the company, although they are still nonofficer employees advising the CEO. Broadcom's former chief financial officer, William Ruehle, was also indicted by the SEC on similar charges.
In January 2007 Broadcom restated its financial results and reported more than US$2 billion in additional compensation expenses. It has also agreed to pay US$12 million as part of a settlement with the SEC.