Judge dismisses guilty plea by Broadcom co-founder Henry Samueli

Judge dismisses Broadcom cofounder’s guilty plea

SANTA ANA, Calif. — A federal judge on Wednesday dismissed a guilty plea by Broadcom co-founder Henry Samueli to a charge of lying to investigators in a stock options backdating probe.

U.S. District Judge Cormac J. Carney said Samueli did not make a material false statement to Securities and Exchange Commission investigators and would not be prosecuted for anything dealing with his SEC testimony.

Samueli, owner of the NHL’s Anaheim Ducks, had pleaded guilty to lying to SEC investigators under a plea deal with federal prosecutors as part of a larger criminal probe into stock option backdating at Broadcom.

The Irvine, Calif.-based telecommunications chip maker was ultimately forced to write down $2.2 billion in profits after the options backdating was uncovered.

Carney’s decision came after Samueli testified as a defense witness in the fraud trial of former Broadcom Chief Financial Officer William J. Ruehle, who is accused of backdating. Samueli was granted immunity to testify.

Samueli said he lied to SEC investigators in 2007 when he told them he wasn’t involved in awarding stock options at Broadcom because he didn’t thoroughly consider the question.

Samueli testified that he entered the guilty plea under pressure, hoping to avoid a massive indictment.

“I have listened to your testimony and I can envision that this is actually a very truthful response,” Carney said in federal court in Santa Ana, Calif.

“You are not going to be prosecuted for anything dealing with your SEC testimony,” Carney said, adding that Samueli’s record would be expunged.

The U.S. attorney’s office declined to immediately comment on Carney’s decision.

Samueli’s attorney Gordon Greenberg said he believes the judge left his client clear from any charges related to the criminal backdating probe at Broadcom.

Ruehle and Broadcom co-founder Henry T. Nicholas are both accused of conspiracy and securities fraud, and Nicholas also faces drug-related charges. They have pleaded not guilty.

An exhilarated Samueli thanked Carney.

“You have restored my faith in the criminal justice system, and I must be honest, that faith was shaken in the early days of this whole process,” he said.

Backdating is legal if reported to shareholders, but if not it can allow companies to overstate profits and underpay taxes. It also can diminish shareholder value.