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A federal probe into backdating of stock options at Irvine’s Broadcom Corp. has shifted to cofounder and former chief executive Henry Nicholas and his personal life while at the chipmaker, the Wall Street Journal reported. The options probe is being led by the U.S. Attorney’s office in Orange County, which has broadened its investigation to include a lawsuit against Nicholas by a former personal assistant. The suit charges Nicholas with drug use, creating a “hostile workplace,” and other misconduct, according to the Journal. A lawyer for Nicholas denied the allegations and questioned why a probe into stock options had veered into charges about Nicholas’s personal life. Nicholas hasn’t been charged in the federal probe, which stems from Broadcom’s revised financial statements for 1998 through 2005 with charges of $2.2 billion for stock options that were improperly accounted for. Last week, FBI agents are reported to have come to Nicholas’s Newport Coast home where he’s been living since separating from wife Stacey. The two plan to divorce. The agents had subpoenas for employees of Nicholas to appear before a grand jury, according to the Journal. Nicholas stepped down as Broadcom chief executive in 2003.
ExaDigm Inc., a Santa Ana-based maker of credit card terminals and software, raised $12 million in its second round of venture funding. ExaDigm sells wireless terminals, mobile tracking devices and other checkout gear to retailers, hotels, restaurants, delivery services and transportation and delivery companies. The round was led by investors Dunrath Capital Inc. and Valhalla Partners. ExaDigm added two partners from Dunrath Capital and Valhalla Partners to its board.
The California attorney general’s office last week denied the proposed $55 million sale of Anaheim Memorial Medical Center to Prime Healthcare Services Inc. of Victorville. In a letter to Prime’s attorney, Chief Deputy Attorney General James Humes said that his office wasn’t able to conclude that certain factors under the state’s Corporations Code were satisfied, such as “that the sale is fair to Anaheim, reflects fair market value, contains a market value that has not been influenced by the parties and is consistent with the public interest.”
The examiner appointed to probe the collapse of bankrupt subprime mortgage lender Irvine-based New Century Financial Corp. has sought a judge’s authorization to investigate the company’s dealings with its auditor, KPMG LLP. Michael J. Missal, tapped last month to investigate what went wrong at New Century before it filed for bankruptcy protection in April, said lawyers for KPMG have refused,absent a subpoena,to provide documents and testimony related to the accounting firm’s work for New Century.
Irvine-based HireRight Inc., which does employee background checks and drug screening for employers, expects to raise up to $50 million in its initial public offering, the company said last week in a filing with regulators. The company and investors plan to sell 4.4 million shares in the offering, which doesn’t have a date yet. HireRight’s expected amount of money raised is down from a projection of $86 million at the time it first announced plans to go public in February.
Costa Mesa-based Ceradyne Inc., a maker of ceramics for military armor, dental braces and automotive products, is paying $27.5 million to buy a supplier of powders to one of its divisions. Ceradyne is buying Tennessee’s Minco Inc., which has yearly sales of about $20 million. The acquisition fits in with Ceradyne’s effort to diversify beyond its mainstay business of supplying military armor.
Costa Mesa’s Resources Connection Inc., an accounting and financial consulting company, posted better-than-expected earnings, sending its shares up some 8% the day after. Profit for the quarter ended May 31 rose 2% from a year earlier to $16.1 million, beating Wall Street’s expected $15.5 million. Excluding stock option expenses, the company said it earned $20 million in the quarter. Revenue rose 21% to $200.5 million. Analysts expected revenue of $199 million.
Anaheim-based Pacific Sunwear of California Inc. saw sales at stores open at least a year rise more than expected in June, by 4.5%. The increase in same-store sales was led the company’s dominant PacSun chain, which sells clothes inspired by surfing. PacSun stores were up 5.7%, while the company’s smaller demo chain selling urban clothes was down 7.5%. For the current quarter, Pacific Sunwear cut its profit outlook to $12.6 million from $14 million, citing industry pressure for lower prices.
Foothill Ranch-based Wet Seal Inc. reported a 0.7% rise in June same-store sales, coming in below Wall Street’s expectations. Analysts predicted a 1.6% increase. The company’s main Wet Seal stores drove the increase, though the gain was tempered by weaker performance at its Arden B stores.
