Broadcom Co-Founder Off Hook In Shareholder Suit

Broadcom Co-Founder Off Hook In Shareholder Suit - 2/10/2009

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HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

DISMISSAL NEWS:

Broadcom Co-Founder Off Hook In Shareholder Suit
Erin Coe

Securities Law 360. February 10, 2009
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EXCERPT: Broadcom Corp. co-founder Henry T. Nicholas III has won a bid to dismiss claims brought against him in a shareholder class action that accuses the company and several officers and directors of engaging in a scheme to backdate stock options that led to a decline in the company’s stock price. Judge Manuel L. Real of the U.S. District Court for the Central District of California let Nicholas off the hook last week after concluding that the New Mexico State Investment Council, the lead plaintiff in the case, failed to allege any conduct by Nicholas giving rise to liability during the five-year limitations period. The claims alleging violations of securities laws were dismissed with prejudice. The NMSIC claimed that purported misstatements made between July 2005 and July 2006 relate to alleged misconduct that took place before Nicholas left the company. Nicholas, who allegedly resigned from the Irvine, Calif.-based semiconductor manufacturer in January 2003, was first named as a defendant in the shareholder action on April 21. The judge noted that shareholders had not alleged any viable claims within five years of the alleged violation. “Apart from insufficiently vague and conclusory allegations — he is not alleged to have engaged in any relevant conduct or exercised actual control over primary violators after April 21, 2003,” Judge Real wrote in the Jan. 4 order. Attorneys representing the investment council and Nicholas did not return calls seeking comment. The order came just a few days after the judge allowed the class action to proceed against Broadcom and most of the other defendants. The judge found that the lead plaintiff was able to show enough of a tie between the drop in Broadcom’s stock price and disclosures of financial misrepresentations to let the case move forward, according to The Orange County Register.

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