ap.google.com | 8/28/08 | Gillian Flaccus
Broadcom Corp. co-founder Henry Samueli has apologized for lying to the Securities and Exchange Commission during its probe of stock options backdating at the chip maker.
Samueli's two-page written apology, filed Monday with U.S. District Judge Cormac Carney, stands as the first public comment on the case by the billionaire philanthropist and owner of the NHL's Anaheim Ducks.
Samueli is scheduled for sentencing on Sept. 8 on a felony count of lying to the regulatory agency.
Prosecutors have recommended that Samueli get five years probation and pay at least $12 million in penalties, but Carney must sign off on the deal.
Samueli wrote that his first instinct was to fight the case because he didn't want to have a felony on his record. Then, he said, he talked with family and friends and decided to own up to his wrongdoing.
"I have spent days and nights thinking about why I said what I did in front of the SEC on May 25, 2007," he wrote. "My statement before the SEC was completely out of character for me. I have tried to live my life in a way that showed that hard work and honesty were their own reward."
The plea agreement is part of a larger federal criminal probe into stock-options backdating at Broadcom, which was ultimately forced to write down $2.2 billion in profits — the largest accounting restatement to date because of illegal backdating.
The Irvine, Calif.-based company also agreed in April to pay $12 million to settle similar charges without admitting or denying the allegations.
In June, a federal grand jury returned criminal indictments against Broadcom's other billionaire co-founder, Henry T. Nicholas III, alleging conspiracy and securities fraud, as well as drug charges. Nicholas, who pleaded not guilty, is set to go to trial next year.
Broadcom's former vice president of human resources, Nancy Tullos, pleaded guilty to obstruction of justice this year in exchange for her cooperation in the case.
Backdating involves retroactively setting an option's price at a low point in the stock's value, so as to increase profits when shares are sold. If companies backdate options without properly disclosing and accounting for the move, it can cause profits to be overstated and taxes to be underpaid.
Court records indicate Samueli told SEC officials during an interview that he was not involved in granting stock options, even though he had exchanged e-mails with Tullos helping her select a specific date to award stock options to certain company officers. The plea deal would not require Samueli to aid prosecutors, but he would forfeit his right to appeal.
