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Judge rules for Nicholas and Ruehle
Judge who threw out Samueli charges dismisses backdating allegations.
By Susan BelknappPublished: December 15, 2009 03:00 PM
U.S. District Court Judge Cormac J. Carney dismissed criminal charges against Broadcom Corp.’s Henry T. Nicholas, co-founder and former CEO, and William Ruehle, former CFO, in Santa Ana on Tuesday. Both had been accused of backdating stock options to maximize profitability for the Irvine-based semiconductor giant. The dismissal stemmed from a revelation that a federal judge determined that prosecutors had intimidated witnesses, according to Carney.
Nicholas was scheduled to go trial in February and he still faces narcotics-related charges. However, Carney has scheduled a hearing for February to decide whether to proceed with a separate criminal trial.
Ruehle and Nicholas were indicted last year for retroactively changing the dates on Broadcom employee stock options in order to increase the employees' profits. The company had to reduce reported earnings by $2.22 billion from 1998 to 2005 for underreported compensation expenses. It was the largest backdating restatement for any company.
“The government has threatened and intimidated three witnesses,” says Carney. “To submit this case to the jury would be a mockery of justice.”
The judge explained his ruling was based on evidence that one of the prosecutors leaked information about former Broadcom Chairman Henry Samueli’s grand jury testimony to newspapers in order to force him to plead guilty. The same prosecutor also tried to influence the testimony of Broadcom’s former general counsel David Dull after the judge had granted him immunity.
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Nicholas was scheduled to go trial in February and he still faces narcotics-related charges. However, Carney has scheduled a hearing for February to decide whether to proceed with a separate criminal trial. Ruehle and Nicholas were indicted last year for retroactively changing the dates on Broadcom employee stock options in order to increase the employees' profits. The company had to reduce reported earnings by $2.22 billion from 1998 to 2005 for underreported compensation expenses. It was the largest backdating restatement for any company. “The government has threatened and intimidated three witnesses,” says Carney. “To submit this case to the jury would be a mockery of justice.” The judge explained his ruling was based on evidence that one of the prosecutors leaked information about former Broadcom Chairman Henry Samueli’s grand jury testimony to newspapers in order to force him to plead guilty. The same prosecutor also tried to influence the testimony of Broadcom’s former general counsel David Dull after the judge had granted him immunity. NEXT PAGE >> Related headlines Samueli charges set aside Broadcom chips in for Bluetooth audio technology New Century principles face SEC fraud charges Anaheim officials may give KTGY larger role in ARTIC O.C. bankruptcy filings jump in November |
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