Judge: Broadcom co-founder must testify at trial

AP News
Posted: Dec 01, 2009 1:13 PM

Broadcom Corp.'s co-founder must testify at the trial of a former chief financial officer accused of backdating stock options, a judge said.

U.S. District Court Judge Cormac J. Carney in Orange County said he'll sign an order Wednesday compelling testimony by Henry Samueli, co-founder of the Irvine-based computer chip firm.

Carney also granted immunity to Samueli, who indicated through his attorney that he would have asserted his Fifth Amendment right against self-incrimination if he were called as a defense witness in the trial of former CFO William Ruehle.

Broadcom issued a $2.2 billion accounting restatement in January 2007 related to backdating.

The practice occurs when a company retroactively sets the exercise price to a low point in the stock's value to increase profits for an executive or employee when shares are sold.

If backdating isn't properly disclosed, it can cause profits to be overstated and taxes to be underpaid.

Samueli pleaded guilty last year to lying to the Securities and Exchange Commission during the investigation and awaits sentencing.

Broadcom has agreed to pay the SEC $12 million to settle a civil complaint related to backdating but did not admit wrongdoing.


Information from: The Orange County Register, http://www.ocregister.com