They each threw in ,000 and worked out of Nicholas' Redondo Beach home, moving to Irvine four years later, and taking the firm public three years after the Irvine move. It helped make Samueli one of the most influential and richest men in Southern California, which gave him the ability to buy the Anaheim Ducks in 2005 for million. Samueli is getting off much easier than other Broadcom executives. Nicholas III has been indicted on 24 felony counts of misdating stock options to make them more valuable to employees, of distributing drugs to associates, and spiking the drinks of certain Broadcom customers. Indeed, it would be unusual to ask him to do so, given that he has acknowledged providing false testimony to the Securities and Exchange Commission, Adkins said."It's not our custom to put perjurers on the stand," he said.
The franchise is worth substantially more after their Stanley Cup victory in 2007. Attorney’s Office in Santa Ana said the Anaheim Ducks owner and co-founder of Broadcom has agreed to plead guilty to lying to federal authorities regarding his role in the backdating of stock options for Broadcom Corp. In a civil fraud lawsuit, the SEC has charged all three men and former Broadcom General Counsel David Dull with defrauding shareholders by concealing the true costs of employee stock options.
There is no statute that explicitly outlaws backdating stock-option grants, but it seems virtually impossible to backdate options and achieve the ultimate goal of putting grants “in the money” without first deliberately falsifying documents and then covering up the sham.
At least that seems to be the conclusion reached by the Department of Justice and the Securities and Exchange Commission regarding their first case against executives charged with fraud related to backdating.
A quick examination of the cases against Brocade clearly identifies why backdating is synonymous with fraud, even though no U. The practice involves using hindsight to assign a stock-option contract an earlier date than its actual grant date.
By pushing the date into the past, to a time when the underlying stock traded at a lower price than it did the day the grant was issued, the option holder is, in effect, being given the promise of cash.
The cascading litany of alleged charges is not likely to stop with the Brocade case.
Broadcom specializes in semiconductors to improve the performance of smartphones and other communications devices while Brocade’s main products are used to build storage networks inside of corporate data centers.
When they hear of some businessman denounced by the media and indicted by a U. Attorney, they are likely to say to themselves: “Well, there certainly seems to be something to it.
His good luck was that—having lost his job, three years of his life, and millions of dollars—he was ultimately vindicated. Twelve years later, in 2006, revenues were .7 billion—a thousand-fold increase.
As a result, journalism today is populated by innumerable muckrakers, and the Justice Department by hundreds of “dockside bullies.”Bill Ruehle’s bad luck was to discover this first-hand. Ruehle was the chief financial officer (CFO) of Broadcom Communications, an Internet company founded in 1991 by “a quiet electronics engineering professor from UCLA (Henry Samueli) and his not-so-quiet student (Henry Nicholas).” Broadcom first turned a profit in 1994: revenues were .6 million.
Ruehle, You Are a Free Man —A Broadcom Saga: My Fight for Justice. Likewise, cynical government prosecutors have many incentives to pursue media-defamed businessmen, also regardless of guilt: convictions bring prosecutors journalistic adulation, departmental promotions, lavish private-firm job offers, and even political power.
ESOs are usually granted at-the-money, i.e., the exercise price of the options is set to equal the market price of the underlying stock on the grant date.