Broadcom options backdating indictment
The defense attorney continued: “At all times, Bill acted in good faith and believed Broadcom’s financial statements were accurate … The government’s indictment unsuccessfully attempts to transform a company’s technical accounting error into criminal conduct.
Nicholas’ attorney, Gregory Craig, did not immediately return CFO.com’s phone call seeking comment. They’re trying to throw everything at him from eight years ago,” Craig said, according to the Associated Press.
The options were issued on a performance basis according to a “matrix” developed by management.
However, in a widely reported statement, Craig said that Nicholas was innocent and would fight the charges. The indictment detailed several alleged schemes focused on backdating stock options, one involving what is known as a “focal” grant process.
Introduced at Broadcom in 2000, the focal grant revamped the older practice of issuing options to individual employees on the anniversary of their date of hire.
In a separate indictment, Nicholas was taken into custody on drug charges, that police say involved a “warehouse” of cocaine and the CEO slipping Ecstasy into the drinks of other executives. attorney’s indictments, unsealed on Thursday, allege that between 19, Ruehle, Nicholas, and other Broadcom managers, conspired to backdate stock option grants by selecting grant dates in the past — when the stock price had been lower than the current market price — which gave the options immediate value (putting them “in-the-money”.) In addition, the CFO and Nicholas are charged with making false claims to Broadcom’s independent auditor, Ernst & Young, and falsifying documents filed with the SEC, including the company’s Form 10-Ks, Form 10-Qs, and proxy statements.
Furthermore, in May, Nicholas, Ruehle and others were charged by the Securities and Exchange Commission for violating securities law. “Bill Ruehle is innocent of the charges in the indictment, and he looks forward to the opportunity to clear his good name in a court of law, said Ruehle’s attorney, Richard Marmaro.