A federal grand jury has indicted Broadcom Corp. cofounder and former chief executive Henry Nicholas on charges related to the backdating of options at the chipmaker and suspicion of violating federal drug laws.
The widely expected indictments charge Nicholas with 25 counts, including conspiracy, securities fraud, false certification of financial reports, filing false statements with the Securities and Exchange Commission, wire fraud and conspiracy to distribute and acquire controlled substances.
Nicholas turned himself into federal agents and is free on $3.3 million baii.
Also charged in the stock options indictment is former Broadcom chief financial officer William Ruehle.
Lawyers for both men deny the charges and said they will fight them.
Two others involved in the federal criminal probe, Broadcom cofounder Henry Samueli and on-leave general counsel David Dull, weren’t charged in the indictment.
Samueli is referred to “H.S.” in the indictment and called an unindicted co-conspirator.
Further indictments still could be pending.
Last year, Broadcom took $2.2 billion in charges to earnings from 1998 to 2003 to account for misdated stock options. The restatement bill was the largest of any company involved in the backdating issue.
Nicholas was Broadcom’s chief executive from the company’s 1990s founding until 2003.
The drug charges allege Nicholas used his former Laguna Hills home, a Laguna Niguel warehouse, his current Newport Coast home and a Las Vegas condominium for using and distributing ecstasy, cocaine and speed.
