Stock Options Scandal
On July 14, 2006, Broadcom announced it had to subtract $750,000,000 from earnings due to stock options irregularities. On September 8, 2006 the amount was doubled to $1.5 billion. The company may also owe additional taxes. On January 24, 2007, it announced a restatement of its financial results from 1998 to 2005 that totaled $2.22 billion.
On May 15, 2008, Samueli, Broadcom CTO, resigned as chairman of the board and took of a leave of absence as Chief Technology Officer after being named in a civil complaint by the U.S. Securities and Exchange Commission (SEC).
On June 5, 2008, Broadcom co-founder and former CEO Henry Nicholas and former CFO William Ruehle were indicted on charges of illegal stock-option backdating. Nicholas was also indicted for violations of federal narcotics laws. However, in December 2009, federal judge Cormac J. Carney threw out the options backdating charges against Nicholas and Ruehle after finding that federal prosecutors improperly tried to prevent three defense witnesses from testifying.
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