Broadcom Corp co-founder Henry Samueli and his wife Susan leave Federal Court after a sentencing hearing in Santa Ana, California September 8, 2008. Carney rejected the deal as too lenient, saying he did not want the public to think the billionaire owner of the NHL Anaheim Ducks could buy justice. Under the plea agreement, Samueli would have served five years probation and paid million to the federal government in addition to a 0,000 fine — the maximum allowed by law for the offense.
Samueli pleaded guilty in June to a criminal charge of making a materially false statement to Securities and Exchange Commission investigators in a backdating case. On Tuesday, Carney warned Samueli that if he loses his appeal, he could face a harsher sentence than the one he had agreed to with prosecutors. Samueli would not have been required to help federal prosecutors build their cases against Broadcom's former chief financial officer William J. Nicholas III, who are accused of conspiracy and securities fraud in connection with the backdating probe.
Carney he was guilty of the single felony of making a false statement.
However, Samueli still faces an SEC lawsuit alleging that he helped orchestrate a five-year scheme to secretly backdate employee stock options.
Samueli also could face perjury charges if any testimony he gives at the trial of Nicholas and Ruehle differs from what he told the SEC in last year’s deposition.
It is legal when properly accounted for, but if companies fail to properly disclose the move, profits can be overstated and taxes underpaid.
The probe into Broadcom's options backdating led the Irvine, California-based telecommunications chipmaker to write down $2.2 billion last year, the largest restatement of its kind.
co-founder, could face thorny legal issues if he is called to testify at the upcoming securities fraud trial of the Irvine chip maker’s other founder, Henry Nicholas III. Samueli’s plea agreement doesn’t require him to cooperate with the government in its investigation of stock-options backdating at Broadcom, and it doesn’t provide him with blanket immunity should he be called to testify at the trial of Nicholas and former Broadcom chief financial officer William Ruehle.
Samueli pleaded guilty Monday in federal court in Santa Ana to a single count of making a false statement to the Securities and Exchange Commission. District Judge Cormac Carney doesn’t agree to impose that sentence, Samueli can withdraw his guilty plea. Nicholas and Ruehle were indicted earlier this month for their alleged role in the backdating at Broadcom.
Broadcom Corporation co-founder Henry Samueli has pleaded guilty to lying to the Securities and Exchange Commission as it probed stock option backdating at the chip maker.
Samueli, a billionaire philanthropist and owner of the National Hockey League's Anaheim Ducks, told US District Court Judge Cormac J.
As part of his plea, Samueli admitted that he lied when he told SEC staff during a deposition last year that “I was not involved in the process” of backdating options given to Broadcom executives. Supreme Court ruled in 1999 that “a plea of guilty is only a waiver of Fifth Amendment rights with respect to the particular information you disclose in connection with your plea,” Rosenthal said.
Larry Rosenthal, a former federal prosecutor who now teaches at Chapman University Law School in Orange, said Carney can’t find that Samueli has waived his Fifth Amendment right, except with respect to the specific facts in his plea agreement. As part of Samueli’s plea agreement, the government promised not to prosecute him for any options-related activity at Broadcom.
Last week, Judge Carney of the Central District of California dismissed charges against former Broadcom executives with prejudice, entering a judgment of acquittal for one.