Broadcom ex-CEO pleads not guilty in criminal cases

Former Broadcom Chief Executive Henry Nicholas III pleaded not guilty on Monday to charges stemming from an alleged stock options backdating conspiracy and to federal drug charges.

The technology company's former chief financial officer, William Ruehle, also pleaded not guilty to the backdating-related charges during the brief hearing in federal court in Santa Ana, Calif.

Nicholas, dressed conservatively in a blue suit, waived reading of the two June 5 indictments with an emphatic, "No thank you."

He is scheduled to return to court on Monday afternoon to discuss going back to a drug rehabilitation program that was interrupted by his indictment and release on $3.3 million bail, the conditions of which include drug testing, home detention and electronic monitoring.

Nicholas, who co-founded Broadcom and resigned as CEO in 2003, and Ruehle are charged in a 21-count indictment that accuses them of scheming to backdate millions of stock options and to falsify documents to further the fraud from 1999 to 2005.

The company had to take a $2.2 billion accounting charge in 2007 because it failed to record the stock-based compensation expenses during those years.

A separate indictment accuses Nicholas of keeping a supply of illegal drugs that he used to spike the drinks of industry executives and Broadcom customers at parties he held at his homes in Southern California and Las Vegas and at a California warehouse.

U.S. Magistrate Judge Robert Block assigned the cases to separate federal judges in Santa Ana and set a July 21 court appearance for Nicholas and Ruehle in the backdating case, and a July 14 appearance for Nicholas in the drug case.

The judge set tentative trial dates for both cases on July 29, but that date is likely to change.

Neither defendant nor their attorneys had any comment after the hearing.

Last month, the Securities and Exchange Commission filed a civil action against Nicholas, Ruehle, Broadcom Chairman and co-founder Henry Samueli and the company's general counsel.

Story Copyright © 2008 Reuters Limited. All rights reserved.

[benjaminstraight]

This is going to drag on for awhile.