Broadcom co-founder takes stand in fraud trial

Dec 08, 2009 By GILLIAN FLACCUS , Associated press Writer

(AP) -- Broadcom Corp.'s co-founder took the witness stand Tuesday in the fraud trial of the company's former chief financial officer.

Henry Samueli won immunity from a last week and was ordered to testify. He was likely to testify through Tuesday afternoon as a defense witness for former CFO William Ruehle, who is accused of backdating stock options.

Backdating occurs when a company retroactively sets the options' exercise price to a low point in the stock's value to increase the recipient's profits when the shares are sold. If the practice isn't properly disclosed, it can cause profits to be overstated and taxes to be underpaid.

hasn't admitted any wrongdoing, but the computer chip maker reduced previous financial results by $2.2 billion in 2007 and agreed to pay $12 million to settle a civil complaint over the issue.

Samueli pleaded guilty last year to lying to during its investigation. In exchange, Samueli was to serve five years of probation and pay $12 million to the federal government.

But U.S. Cormac J. Carney rejected the plea deal as too lenient and said he didn't want the public to think the billionaire owner of the NHL's Anaheim Ducks could buy justice. Samueli appealed the rejection and lost.

Carney is expected to resentence Samueli after Ruehle's trial.

Samueli's legal team, however, has asked a judge to dismiss the charge due to prosecutor misconduct, including allegations that Assistant U.S. Attorney Andrew Stolper leaked grand jury information to the media and contacted the attorney of another defense witness about his upcoming testimony.

Stolper has declined to comment on the allegations.

©2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Explore further: Ericsson profit down 10 pct despite higher sales

add to favorites email to friend print save as pdf

Related Stories

Openings begin in Broadcom backdating case

Oct 23, 2009

(AP) -- A jury was set Friday to hear opening statements in the federal trial of former Broadcom Corp. Chief Financial Officer William Ruehle, who faces conspiracy and fraud charges in an alleged scheme to backdate stock ...

Monster settles SEC backdating charges for $2.5M

May 18, 2009

(AP) -- Monster Worldwide Inc., which runs the Monster job search Web site, has agreed to pay $2.5 million to settle federal civil charges that it secretly backdated options for its executives and employees.

Appeals court orders new trial in Brocade case

Aug 18, 2009

(AP) -- A federal appeals court has tossed out the criminal conviction of the first Silicon Valley executive to go to trial in a stock options scandal that triggered charges against at least a dozen executives.

SEC drops options case vs former McAfee lawyer

Mar 19, 2009

(AP) -- The Securities and Exchange Commission says it has dropped its lawsuit against McAfee Inc.'s former general counsel which accused him of illegally tampering with stock options.

BetOnSports fined $28 million, gets probation

Dec 02, 2009

(AP) -- Defunct online gambling site BetOnSports.com has been sentenced to probation and a $28.2 million fine that lawyers on both sides say probably will never be paid.

Recommended for you

Ericsson profit down 10 pct despite higher sales

1 hour ago

Wireless equipment maker Ericsson says its third-quarter earnings slumped 10 percent despite higher sales due to increased operating costs and negative effects from currency hedging.

Glass maker deals to exit Apple, Arizona plant

4 hours ago

Nearly 2,000 furnaces installed in a factory to make synthetic sapphire glass for Apple Inc. will be removed and sold under a deal between the tech giant and the company that had been gearing up to produce huge amounts of ...

User comments : 0