SEC may sue over Broadcom options
Federal regulators have served notice that they may sue Broadcom Corp. and its billionaire chairman, Henry Samueli, over improper backdating of stock options, the Irvine computer chip company said Friday.
Broadcom said the Securities and Exchange Commission served so-called Wells notices Thursday on it and on Samueli, who also owns the Anaheim Ducks and is a prominent philanthropist.
The notices warned that the SEC staff intends to recommend that the commission file suit over alleged violations of securities laws. Broadcom said it and Samueli would exercise their right to respond to the proposed charges in an attempt to forestall the SEC lawsuits.
Broadcom this year reduced past financial results by $2.2 billion to reflect costs it failed to disclose when it granted stock options to employees from 1998 through mid-2003. Samueli and Henry T. Nicholas III, Broadcom’s former chief executive, were the sole members of the options committee during most of that time.
Broadcom also said it continued to cooperate with a criminal probe into the option grants. It said that it had provided documents to a federal grand jury and that federal prosecutors continued to interview past and present employees, officers and directors of the company.
An attorney representing Samueli couldn’t be reached for comment, and a lawyer representing Nicholas declined to comment.
