Billionaire Henry T. Nicholas’ attorneys moved to dismiss the lawsuit accusing the former Broadcom Corp. chief executive of accounting fraud stemming from a $2.2 billion employee stock option backdating scheme.
In a motion filed today, Nicholas’ attorneys said the SEC fails to make its case against the Newport Coast billionaire because:
- The suit was filed after a statute of limitations expired on most of the allegations.
- Most of the alleged wrongdoing occurred before enactment of the Sarbanes-Oxley Act, which made corporate directors responsible for accounting.
- Most of the complaints do not directly tie Nicholas to wrongdoing.
The suit accuses Nicholas and three co-defendants of deceiving investors, accountants and others in a five-year scheme to inflate the value of employee compensation by retrospectively choosing the dates of employee stock options. Options are the right to purchase stock at a future date at a fixed price.
Broadcom agreed to pay the SEC $12 million to settle allegations, without admitting wrongdoing, that the company engaged in a five-year $2.2 billion backdating scheme that defrauded investors and violated accounting laws.
Nicholas’ co-defendants previously filed papers demanding dismissal of the SEC lawsuit. They are:
- David Dull, Broadcom’s general counsel, who was not charged with criminal wrongdoing.
- Henry Samueli, who co-founded Broadcom with Nicholas. In a federal criminal case, Samueli pleaded guilty to lying to the SEC about his role in allocating employee stock options. Samueli agreed to pay $12 million and spend three years on probation in return for settling the criminal case. His formal sentencing is set for Aug. 18.
- William J. Ruehle, Broadcom’s former chief financial officer. Ruehle has pleaded not guilty to federal criminal charges related to the options backdating scheme. Nicholas has also pleaded not guilty in that criminal case.
Nicholas has been charged separately with using and distributing illegal drugs. He has pleaded not guilty. That trial is scheduled to occur after completion of the criminal backdating case, which is scheduled to begin in April 2009.
Prosecutors have asked that the SEC’s lawsuit take a back seat to the criminal case, a move that Ruehle’s attorneys oppose. The next hearing in the SEC case is scheduled for Aug. 4 at U.S. District Court in Santa Ana.
Related stories …
- Civil-criminal cases duel in Broadcom backdating cases
- Nicholas trial set for April 2009
- Samueli’s plea raises questions for Nicholas trial
- Broadcom’s Samueli pleads guilty
- NHL suspends Ducks owner Samueli
- Broadcom billionaire charged with distributing ‘ecstasy’ to prostitutes, others
- Billionaire who built Broadcom led a secret life, accusers say
Here is a solution to two issues facing Orange County today, BroadCON and Susan Atkins.
Mister Nicholas The Ripoff why don’t you have Susan Atkins move in with you.
You pay for her medical bills for her final months and then take care of and cover the cost of her funeral arrangements.
Do that and all charges will be dropped.
Sound fair to you? Call me.
Seamus you’re a fool. Nicholas did 1,000x more good for the community and for the world, than the harm done by the backdating that so many companies were doing at the time. During that time it was almost common practice to backdate options. Nicholas made the world a better place through technology but Seamus probably did nothing for the world.
ocbear
switch to decaf
Greedy BASTARD I HOW CAN U SLEEP BUT DON’T WORRY IT ALL STAY;S BEHIND U CAN’T TAKE IT WITH U
ocbear, I completely agree. Look at the amount of money Nicholas brought into OC and all the millionaires Broadcom has made over the years. Not to mention the millions that Nicholas donates each year to worthy kids and others each year through his couple of foundations. I can’t believe the smear campaign these folks are running against him. Such a pity they have nothing better to do…
Ocbear and Ocone,
Are you saying one is above the law just because they did some good and gave to charity? The Hell’s Angels gang does lots for charity and for that matter, so did our good Sheriff Mike, does that make them above the law too? It’s all a PR move. Criminal organizations do it all the time to make themselves look good. Your arguments are silly.
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