Broadcom options backdating indictment

Posted by / 19-Feb-2020 23:29

Broadcom options backdating indictment

Stock options were routinely used to recruit or retain employees during the high-tech boom of the late 1990s. After internal discussion that involved Ruehle and others, Nicholas and Samueli in July 1999 “signed Broadcom corporate records fraudulently reflecting” the earlier date, the indictment alleges.The indictment details one such arrangement, when Nicholas in June 1999 hired an engineer identified in the indictment by his initials, M. It was a move that would come back to bite them, according to the indictment.Nicholas quit the company in 2003, saying he wanted to spend time trying to repair his marriage, which later fell apart. the drinks of technology executives and representatives who worked for Broadcom’s customers.”* “Hired prostitutes and escorts for himself and customers, representatives and associates of Broadcom and other business entities with which he was affiliated and supplied such prostitutes and escorts with controlled substances.”* “Used threats of physical violence and death and payments of money to attempt to conceal his unlawful conduct.”* “Constructed an underground room and tunnel” at a home where illicit drugs were supplied.* “Distributed and used controlled substances during a flight on a private plane between Orange County, California, and Las Vegas, Nevada, causing marijuana smoke to enter the cockpit and requiring the pilot flying the plane to put on an oxygen mask.”* “Entered into a

Stock options were routinely used to recruit or retain employees during the high-tech boom of the late 1990s. After internal discussion that involved Ruehle and others, Nicholas and Samueli in July 1999 “signed Broadcom corporate records fraudulently reflecting” the earlier date, the indictment alleges.The indictment details one such arrangement, when Nicholas in June 1999 hired an engineer identified in the indictment by his initials, M. It was a move that would come back to bite them, according to the indictment.Nicholas quit the company in 2003, saying he wanted to spend time trying to repair his marriage, which later fell apart. the drinks of technology executives and representatives who worked for Broadcom’s customers.”* “Hired prostitutes and escorts for himself and customers, representatives and associates of Broadcom and other business entities with which he was affiliated and supplied such prostitutes and escorts with controlled substances.”* “Used threats of physical violence and death and payments of money to attempt to conceal his unlawful conduct.”* “Constructed an underground room and tunnel” at a home where illicit drugs were supplied.* “Distributed and used controlled substances during a flight on a private plane between Orange County, California, and Las Vegas, Nevada, causing marijuana smoke to enter the cockpit and requiring the pilot flying the plane to put on an oxygen mask.”* “Entered into a $1-million settlement agreement . Ruehle.* Persuaded a former Broadcom engineer to drop a lawsuit that would have exposed the backdating scheme at the Irvine computer chip maker.

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Stock options were routinely used to recruit or retain employees during the high-tech boom of the late 1990s. After internal discussion that involved Ruehle and others, Nicholas and Samueli in July 1999 “signed Broadcom corporate records fraudulently reflecting” the earlier date, the indictment alleges.

-million settlement agreement . Ruehle.* Persuaded a former Broadcom engineer to drop a lawsuit that would have exposed the backdating scheme at the Irvine computer chip maker.

A second indictment accused Nicholas of manipulating stock options at Broadcom, the Irvine-based maker of computer chips used in such products as mobile phones, Apple Inc.'s i Pod and Nintendo Co.'s Wii consoles.

“The government’s indictment unsuccessfully attempts to transform a company’s technical accounting error into criminal conduct.”--Claims of sex and drugs In the drug indictment, Nicholas is alleged to have used death threats and payoffs to conceal his “unlawful conduct.”The indictment describes repeated drug purchases for Nicholas, which were sometimes disguised as “supplies” or “refreshments” on invoices.“In or around 2001, in the lobby of Broadcom’s offices . The document also lists three properties described in previous Los Angeles Times stories about Nicholas’ alleged indulgences in drugs and prostitutes:* An equestrian estate in Laguna Hills, where Nicholas had constructed a series of tunnels and underground rooms, including one that contractors alleged was intended to become a “secret and convenient lair” to indulge his “manic obsession with prostitutes.”* A warehouse-office complex in nearby Laguna Niguel, which contractors said was used for sex and drugs and nicknamed “The Ponderosa.”* A Newport Coast residence where Nicholas was trying to start a record company and where rock groups frequently visited.

In a 2006 lawsuit seeking back wages, former Nicholas aide Kenji Kato contended that this home also was the scene of frequent drug use and other sordid behavior.“The allegations of our complaint seem to be validated by the indictment -- both indictments,” said Joseph Kar, the attorney for Kato, whose lawsuit is pending in Los Angeles County Superior Court.

Ruehle’s attorney, Marmaro, said his client relied on the advice of Broadcom’s auditors in operating the stock option program.

He characterized the backdating problems as accounting glitches with no intent to defraud shareholders or mislead financial analysts.“This is a classic case of government overreaching,” Marmaro said in a statement. Nicholas directed a Broadcom employee to provide approximately ,000 to ,000 in cash to a drug courier in exchange for an envelope containing controlled substances,” the indictment alleges.

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In May, the US Securities and Exchange Commission (SEC) filed a civil complaint [JURIST report] against Broadcom for stock option back-dating. Although the practice itself is not illegal, it usually involves a violation of SEC and other federal reporting requirements [SOX guide].