Broadcom Corporation - Securities Class Action

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Copyright (c) 2001
Stanford Law School

Broadcom Corporation Summary: The original complaint charges Broadcom and certain of its officers and directors with issuing a series of materially false and misleading statements in violation of Section 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder. On July 14, 2006, Broadcom announced that it would record more than $750 million in added expenses and restate its past earnings related to the illegal backdating of stock options. Prior to any news of options backdating reaching in the market, shares of Broadcom traded at slightly above $40.00 per share and, thereafter, shares traded down to approximately $27.50 per share -- a rapid decline of over 31%.

On November 29, 2006 the judge entered an order stating that the lead plaintiff "shall file a consolidated class-action complaint within 60 days of Broadcoms filing of the Restatement with the US Securities and Exchange Commission." The lead plaintiffs filed a motion for an extension of time to file the consolidated complaint, which the judge denied on March 15, 2007. The plaintiffs appealed the ruling and the US Court of Appeals granted their motion to stay the March order.

The lead plaintiff filed a Consolidated Amended Complaint on April 21, 2008. Defendants responded with motions to dismiss the complaint on June 20, 2008. The judge ruled in favor of the defendants on October 6, 2008, but provided plaintiffs twenty days to amend and re-file.

The lead plaintiff filed a Second Consolidated Complaint was filed on October 27, 2008. Renewed motions for dismissal were filed on November 24, 2008. On February 2, 2009, the judge denied the defendants' motions, with the exception of Ernst & Young, Broadcom's auditor and a couple individuals. Plaintiffs filed a notice with the court that they will not seek to amend their complaint.

On March 31, 2009, Judge Manuel L. Real signed the Order and Final Judgment as to defendant Ernst & Young LLP. On April 28, 2009, the lead plaintiff filed a Notice of Appeal to the Ninth Circuit Court of Appeals.

According to a press release dated December 29, 2009, fabless semiconductor vendor Broadcom Corp. has agreed in principle to settle for $160.5 million in cash a securities class action litigation pending against the company and some of its current and former officers and directors, the company said Tuesday (Dec. 29). Under the proposed settlement, the claims against Broadcom and its officers and directors will be dismissed with prejudice, Broadcom (Irvine, Calif.) said. The company said it expects to record the settlement amount as a one-time charge in its fourth quarter financial statement. The proposed settlement remains subject to the satisfaction of various conditions, including negotiation and execution of a final stipulation of settlement, and approval by the U.S. District Court for the Central District of California, Broadcom said. ... Earlier this month, a U.S. District Court judge dismissed related securities fraud charges against Broadcom co-founder Henry Nicholas and William Ruehle, the company's former chief financial officer, citing prosecutor misconduct. The same judge earlier dismissed a guilty plea entered by Broadcom co-founder Henry Samueli on charges that he lied to investigators in connection with the stock options backdating probe.

On April 30, 2010, the lead plaintiffs filed a motion for preliminary approval of proposed Class Action settlement with Broadcom defendants, which was approved on June 1, 2010. The Settlement Hearing will be held on August 2, 2010, to determine, among other things, whether the proposed Settlement is fair, reasonable and adequate, and should be approved by the Court.

According to a press release dated June 11, 2010, pursuant to Rule 23 of the Federal Rules of Civil Procedure and an Order of the Court, that the above-captioned action has been certified as a class action for the purposes of settlement only and that a settlement of certain claims for $160,500,000 has been proposed by the Settling Parties. Claims against defendant Ernst & Young LLP are not part of the Settlement and continue to be litigated on appeal. A hearing will be held before the Honorable Manuel L. Real of the United States District Court for the Central District of California in the Spring Street Courthouse, Room 8, 312 N. Spring Street, Los Angeles, CA 90012, at 10:00 a.m., on August 2, 2010 to determine: whether the proposed settlement should be approved by the Court as fair, reasonable, and adequate; whether the Settlement Class should be certified and a class representative and class counsel be appointed; whether the proposed plan of allocation for distribution of the settlement proceeds should be approved; to consider the request of Lead Counsel for attorneys’ fees and reimbursement of litigation expenses; and to consider the request of Lead Plaintiff, if any, for reimbursement of its reasonable costs and expenses relating to its representations of the Settlement Class. The Court may change the date of the hearing without providing another notice.

On August 2, 2010, the hearing was held before Judge Manuel L. Real. According to the Court Minutes, there are no objectors to the settlement present. The Court grants both the motion for final approval of the proposed class action settlement with Broadcom defendants and the motion for attorney's fees and reimbursement of litigation expenses.

According to a press release dated April 14, 2011, a federal appeals court Thursday reinstated a class-action lawsuit filed by Broadcom Corp. investors against Ernst & Young, saying the auditors should have known about an option-backdating scheme at the Irvine tech company. A lower-court judge had dismissed the case against Ernst & Young after concluding the plaintiffs hadn’t shown that the auditors knew that the value of Broadcom’s stock was probably inflated by the company’s manipulation of its financial statements. Thursday’s ruling by the U.S. 9th Circuit Court of Appeals in San Francisco reversed that dismissal and scolded Ernst & Young for not acting to stop the $2.2-billion backdating scheme. ... The appeals court action sends the case back to Real for trial, barring other successful legal challenges by the defendants.

INDUSTRY CLASSIFICATION:
SIC Code: 3674
Sector: Technology
Industry: Semiconductors

COMPANY/ISSUER NAME:	Broadcom Corporation
COMPANY/ISSUER TICKER:	BRCM
COMPANY WEBSITE:	http://www.broadcom.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Sonam Bakshi, et al. v. Broadcom Corporation, et al.

COURT: C.D. California	DOCKET NUMBER: 06-CV-5036
JUDGE NAME: Hon. Manuel L. Real
DATE FILED: 08/11/2006	SOURCE: Notice of Filing
CLASS PERIOD START: 07/21/2005	CLASS PERIOD END: 07/13/2006
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Braun Law Group, P.C. (Former) 12400 Wilshire Blvd., Suite 920, Los Angeles, CA, 90025 (voice) 888.658.7100, (fax) , info@braunlawgroup.com Climaco, Lefkowitz, Peca, Wilcox & Garofoli Co. L.P.A. The Halle Building, Ninth Floor; 1228 Euclid Avenue, Cleveland, OH, 44115 (voice) 877-621-1228, (fax) , cmjani@climacolaw.com Kahn Gauthier Swick, LLC (New Orleans) 650 Poydras St. Suite 2150, New Orleans, LA, 70130 (voice) 504.455.1400, (fax) , lewis.kahn@kglg.com Lieff, Cabraser, Heimann & Bernstein LLP Embarcadero Center West 275 Battery Street, Suite 3000, San Francisco, CA, 94111-3339 (voice) 415.956.1000, (fax) 415.956.1008, Prickett, Jones & Elliott, P.A. (Dover) 11 North State Street, Dover, DE, 19901 (voice) 302.674.3841, (fax) 302.674.5864, info@prickett.com Schiffrin & Barroway LLP 3 Bala Plaza E, Bala Cynwyd, PA, 19004 (voice) 610.667.7706, (fax) 610.667.7056, info@sbclasslaw.com Schubert & Reed LLP Two Embarcadero Center, Suite 1050, San Francisco, CA, 94111 (voice) 415.788.4220, (fax) 415.788.0161, mail@schubert-reed.com Scott & Scott LLC (Connecticut) P.O. Box 192, 108 Norwich Avenue, Colchester, CT, 06415 (voice) 860.537.5537, (fax) 860.537.4432, scottlaw@scott-scott.com Wolf Haldenstein Adler Freeman & Herz LLP (New York) 270 Madison Avenue, New York, NY, 10016 (voice) 212.545.4600, (fax) 212.686.0114, newyork@whafh.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 9

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint for Violations of Federal Securities Laws - Jury Trial Demanded
Type: Complaint		Date on the document: 08/11/2006
Declaration Of Joseph J. Tabacco, Jr. In Support Of State Teachers Retirement System Of Ohio's Motion For Appointment Of Lead Plaintiff, Approval Of Selection Of Lead Counsel And Consolidation Of Related Actions
Type: Declaration		Date on the document: 10/11/2006
Amended Certificate of Service
Type: Other		Date on the document: 10/12/2006
Certificate of Service
Type: Other		Date on the document: 10/12/2006
Certificate of Service
Type: Other		Date on the document: 10/12/2006
Certification As To Interested Parties
Type: Other		Date on the document: 10/12/2006
Declaration Of Aaron H. Darsky In Support Of Motion Of The Itaipu Pension Fund; To Be Appointed Lead Plaintiff; To Consolidate Related Cases And To Approve Proposed Lead Plaintiff's Choice Of Counsel
Type: Declaration		Date on the document: 10/12/2006
Declaration Of Bryan L. Crawford In Support Of Motion To Consolidate Related Actions, Appoint Lead Plaintiffs, And Approve Selection Of Lead Counsel
Type: Declaration		Date on the document: 10/12/2006
Declaration Of Patrice L. Bishop In Support Of Motion By Justin Shenkarow For Appointment Of Lead Plaintiff And Lead Counsel Pursuant To Section 21D Of The Securities Exchange Act Of 1934
Type: Declaration		Date on the document: 10/12/2006
Declaration Of Thomas A. Dubbs In Support Of The Motion Of The New Mexico State Investment Council For Appointment As Lead Plaintiff And Approval Of Selection Of Lead Counsel
Type: Declaration		Date on the document: 10/12/2006
Memorandum Of Law In Support Of Motion To Consolidate Related Actions, Appoint Lead Plaintiffs, And Approve Selection Of Lead Counsel
Type: Memorandum		Date on the document: 10/12/2006
Memorandum of Points and Authorities In Support Of Motion By Justin Shenkarow For Appointment Of Lead Plaintiff And Lead Counsel Pursuant To Section 21D Of The Securities Exchange Act Of 1934
Type: Memorandum		Date on the document: 10/12/2006
Memorandum Of Points And Authorities In Support Of Motion Of The Itaipu Pension Fund; To Be Appointed Lead Plaintiff; To Consolidate Related Cases And To Approve Proposed Lead Plaintiff's Choice Of Counsel
Type: Memorandum		Date on the document: 10/12/2006
Memorandum Of Points And Authorities In Support Of The Motion Of The New Mexico State Investment Council For Appointment As Lead Plaintiff And Approval Of Selection Of Lead Counsel
Type: Memorandum		Date on the document: 10/12/2006
Notice Of Motion And Motion By Justin Shenkarow For Appointment Of Lead Plaintiff And Lead Counsel Pursuant To Section 21D Of The Securities Exchange Act Of 1934
Type: Motion		Date on the document: 10/12/2006
Notice Of Motion And Motion Of The Itaipu Pension Fund; To Be Appointed Lead Plaintiff; To Consolidate Related Cases And To Approve Proposed Lead Plaintiff's Choice Of Counsel
Type: Motion		Date on the document: 10/12/2006
Notice Of Motion And Motion To Consolidate Related Actions, Appoint Lead Plaintiffs, And Approve Selection Of Lead Counsel
Type: Motion		Date on the document: 10/12/2006
Notice Of Motion, Motion And Memorandum Of Points And Authorities In Support Of State Teachers Retirement System Of Ohio's Motion For Appointment As Lead Plaintiff, Approval Of Selection Of Lead Counsel And Consolidation Of Related Actions
Type: Motion		Date on the document: 10/12/2006
Notice Of The Motion Of The New Mexico State Investment Council For Appointment As Lead Plaintiff And Approval Of Selection Of Lead Counsel
Type: Notice		Date on the document: 10/12/2006
Proof of Service
Type: Other		Date on the document: 10/12/2006
Proof of Service by Mail
Type: Other		Date on the document: 10/12/2006
[Proposed Order] Granting Motion Of The Itaipu Pension Fund; To Be Appointed Lead Plaintiff; To Consolidate Related Cases And To Approve Proposed Lead Plaintiff's Choice Of Counsel
Type: Order		Date on the document: 10/12/2006
[Proposed] Order Appointing State Teachers Retirement System Of Ohio As Lead Plaintiff Approving Its Choice Of Lead Counsel And Consolidating Related Actions
Type: Order		Date on the document: 10/12/2006
[Proposed] Order Appointing The New Mexico State Investment Council For Appointment As Lead Plaintiff And Approval Of Selection Of Lead Counsel
Type: Order		Date on the document: 10/12/2006
[Proposed] Order Consolidating Related Actions, Appoint Lead Plaintiffs, And Approve Selection Of Lead Counsel
Type: Order		Date on the document: 10/12/2006
[Proposed] Order Granting Motion By Justin Shenkarow For Appointment Of Lead Plaintiff And Lead Counsel Pursuant To Section 21D Of The Securities Exchange Act Of 1934
Type: Order		Date on the document: 10/12/2006
Second Amended Proof Of Service
Type: Other		Date on the document: 10/13/2006
Civil Minutes - General
Type: Order Appointing LP/LC		Date on the document: 11/27/2006
U.S. District Court Civil Docket
Type: Docket		Date on the document: 11/27/2006

REFERENCE COMPLAINT

In Re: Broadcom Corporation Securities Litigation

COURT: C.D. California	DOCKET NUMBER: 06-CV-5036
JUDGE NAME: Hon. Manuel L. Real
DATE FILED: 10/27/2008	SOURCE: Docket
CLASS PERIOD START: 07/21/2005	CLASS PERIOD END: 07/13/2006
TYPE OF COMPLAINT: Second Amended and Consolidated
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Labaton Sucharow LLP 140 Broadway, New York, NY, 10005 (voice) 212.907.0700, (fax) 212.818.0477, info@labaton.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 1

DOCUMENTS FOR THE REFERENCE COMPLAINT
Consolidated Class Action Complaint
Type: Complaint		Date on the document: 04/21/2008
Civil Minutes - General
Type: Order		Date on the document: 10/06/2008
Second Consolidated Amended Class Action Complaint
Type: Complaint		Date on the document: 10/27/2008
Minutes In Chambers
Type: Order		Date on the document: 02/02/2009
Final Judgment
Type: Order		Date on the document: 03/31/2009
Amended Order Staying Class Action
Type: Order		Date on the document: 10/08/2009
Exhibit 1 [Stipulation and Agreement of Settlement with Broadcom Defendants]
Type: Settlement		Date on the document: 04/30/2010
Notice Of Pendency Of Class Action And Proposed Settlement With Broadcom Defendants
Type: Notice		Date on the document: 06/01/2010
Preliminary Approval Order Providing For Notice And Hearing In Connection With Proposed Class Action Settlement With Broadcom Defendants
Type: Order		Date on the document: 06/01/2010
Civil Minutes - General
Type: Other		Date on the document: 08/02/2010
Order Approving Plan Of Allocation
Type: Order		Date on the document: 08/11/2010
Order Awarding Lead Counsel Attorneys’ Fees And Reimbursement Of Litigation Expenses
Type: Order Approving AF&E		Date on the document: 08/11/2010
Final Order And Judgment As To Broadcom Defendants
Type: Order		Date on the document: 08/12/2010
U.S. District Court Civil Docket
Type: Docket		Date on the document: 02/14/2011

OTHER DOCUMENTS
U.S. District Court Civil Docket
Case Name and/or Number: Oubo Jin, et al. v. Broadcom Corporation, et al.
Type: Docket		Date on the document: 04/11/2006
U.S. District Court Civil Docket
Case Name and/or Number: Alfred Ronconi, et al. v. David Dull, et al.
Type: Docket		Date on the document: 09/06/2006
U.S. District Court Civil Docket
Case Name and/or Number: Yen Shei, et al. v. Scott A McGregor, et al.
Type: Docket		Date on the document: 09/27/2006
U.S. District Court Civil Docket
Case Name and/or Number: Oubo Jin, et al. v. Broadcom Corporation, et al.
Type: Docket		Date on the document: 10/02/2006
U.S. District Court Civil Docket
Case Name and/or Number: L A Murphy, et al.v. Scott McGregor, et al.
Type: Docket		Date on the document: 10/11/2006
U.S. District Court Civil Docket
Case Name and/or Number: Minnesota Bakers Union Pension Fund, et al. v. Broadcom Corporation, et al.
Type: Docket		Date on the document: 06/27/2008
U.S. District Court Civil Docket
Case Name and/or Number: In Re Broadcom Corporation Derivative Litigation
Type: Docket		Date on the document: 12/14/2009

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