Former Broadcom Corp. chief financial officer Bill Ruehle won a round in the early phases of his upcoming trial over backdated stock options at the Irvine chipmaker.
U.S. District Judge Cormac Carney ruled this week that talks about options between Ruehle and lawyers from Irell & Manella LLP can’t be used by federal prosecutors, according to a report in legal newspaper the Los Angeles Daily Journal.
According to the report, Carney said Irell didn’t get written consent to disclose what the judge considered to be confidential talks between Ruehle and Irell, which works for Broadcom.
The ruling was a setback to prosecutors, who had hoped to use the conversations to try and show Ruehle’s involvement in the backdating of options at Broadcom.
In early 2007, Broadcom restated several years of financial results to reflect $2.2 billion in charges for misdated stock options. The restatement bill was the largest of any company involved in a stock options issue.
Former chief executive Henry “Nick” Nicholas also faces charges in the options case.
Cofounder and Broadcom adviser Henry Samueli pleaded guilty to one felony count of misleading investigators in the case and is awaiting sentencing, pending the trials of Ruehle and Nicholas.
Ruehle left Broadcom in 2006 after serving as financial chief for most of the company’s existence. Nicholas, the company’s other cofounder, left in 2003.
Judge Carney sided with Ruehle’s lawyers who argued their client believed Irell was gathering information to defend him.
Prosecutors tried to argue Ruehle knew Irell would be disclosing its talks with him to financial auditors.
Lawyers from Irell also later shared details of their conversation with FBI investigators, according to the Daily Journal.
Ruehle’s case is set to go to trial in October.