Broadcom's Samueli to plead guilty in backdating case

Broadcom co-founder Henry Samueli is expected to plead guilty to making a materially false statement in a criminal backdating case filed on Monday, according to court documents.

Samueli is due in U.S. District Court in Santa Ana, Calif., Monday afternoon to waive the indictment and plead guilty to the single count of making a false statement to SEC investigators. The criminal case was filed at the same time as the proposed plea agreement.

Samueli's plea comes amid burgeoning government enforcement action against Broadcom and its top officers, including the indictment this month of co-founder Henry Nicholas III on backdating and drugs charges, following the company's restatement last year of $2 billion in compensation charges.

Although the maximum penalty for the charge is five years in prison, federal prosecutors recommended that Samueli receive five years probation and pay $12.2 million in fines and forfeitures, a plea agreement filed with the court said.

He may also petition the court to terminate his probation three years from his sentencing date, the documents said.

Samueli is to maintain his home in Orange County, Calif., but has no other travel restrictions imposed by the agreement. The agreement must be approved by the court.

"Both parties have agreed this is a fair resolution of this issue and we believe it is inappropriate to comment until the judge rules," Samueli's attorney, Gordon Greenberg, said in a statement.

Samueli, who served as Broadcom's chairman and chief technical officer, admitted to falsely telling U.S. Securities and Exchange Commission investigators in May 2007 that he was not involved with options granting practices at the Irvine, Calif., chipmaker, the court documents showed.

In fact, internal company e-mails showed Samueli helped choose a stock options grant date with Nancy Tullos, former vice president of human resources, the documents showed.

Last month, the SEC filed a civil action against Samueli and three other current and former Broadcom executives, alleging that they schemed from 1998 to 2003 to secretly backdate stock option grants.

The backdating forced the company to eventually restate its financial results and report more than $2 billion in extra compensation expenses, the SEC said.

Nicholas and the company's former chief financial officer, William Ruehle, face civil claims and have been indicted on criminal charges related to backdating.

A separate indictment charged Nicholas with keeping a stash of illegal drugs at his homes and at a warehouse that he used to spike the drinks of industry executives and Broadcom customers at parties.

Nicholas and Ruehle pleaded not guilty to all charges.

Samueli resigned as chairman following the SEC filing of the civil complaint against him, Nicholas, Ruehle and Broadcom Chief Counsel David Dull. All denied wrongdoing in the case.

Samueli and Dull took leaves of absence as executive officers of Broadcom until the civil complaint is resolved and are no longer involved in corporate governance, the company's financial reporting or public disclosures, the company said last month.

The SEC previously brought enforcement action against Broadcom and Tullos in connection with the option backdating scheme.

Broadcom shares closed up 0.4 percent on Monday at $26.99 on the Nasdaq.

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