Civil Actions in Question Following Dismissal of Broadcom Criminal Charges

Civil Actions in Question Following Dismissal of Broadcom Criminal Charges - 12-18-2009

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

DISMISSAL NEWS:

Civil Actions in Question Following Dismissal of Broadcom Criminal Charges
Amanda Bronstad

The National Law Journal. December 18, 2009
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EXCERPT: Stock options backdating lawsuits filed by shareholders against Broadcom Corp. face an uncertain future now that a federal judge has thrown out the government's criminal case against two former executives of the Irvine, Calif., computer chip manufacturer. Civil claims remain pending against Broadcom co-founders Henry Nicholas and Henry Samueli, as well as former Chief Financial Officer William Ruehle and former General Counsel David Dull. Lawyers for all four were in court on Tuesday when U.S. District Judge Cormac Carney of Santa Ana, Calif., dismissed criminal charges against Ruehle, who had been in trial since Oct. 23. The judge cited prosecutorial misconduct, finding that the government "distorted the truth-finding process" by, among other things, intimidating and influencing witnesses. He also cited a lack of evidence, noting that there was "considerable debate" about an accounting practice that was used by Broadcom and hundreds of major companies. Carney also dismissed the backdating charges against Nicholas and a civil action brought by the U.S. Securities and Exchange Commission against Samueli, Nicholas, Ruehle and Dull, although he gave the agency the opportunity to file its civil case again. Two shareholder cases -- a derivative lawsuit and a class action -- are pending before a separate judge in Los Angeles related to the backdating of stock options. "We are hopeful that the civil plaintiffs revisit their decision to charge Mr. Ruehle in light of the results of the criminal case," said Ruehle's lawyer, Richard Marmaro, head of the West Coast SEC enforcement and white collar defense practice at New Yorks's Skadden, Arps, Slate, Meagher & Flom. "It was clear, following two months of trial, that there was no fraud committed in connection with Broadcom's stock option program." On Monday, U.S. District Court Judge Manuel Real granted final approval of a $118 million partial settlement in the derivative action.

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