Broadcom Corp. said it plans to pay $150 million in cash as part of a proposed settlement of a class action shareholder lawsuit.
The suit, brought in 2002 by the Minnesota State Board of Investment, was one of two suits that charged Broadcom with boosting sales and profits by improperly accounting for expenses.
Broadcom accounted for warrants issued to customers of companies it acquired as goodwill, a special charge, rather than as discounts or rebates against sales.
The chipmaker later restated results, a move that actually boosted profits.
Under the proposed settlement, Broadcom’s insurer is set to pay $40 million with the company picking up the rest.
Broadcom said it plans to record its payment as a one-time charge for the current quarter.
“We have agreed to settle this lawsuit so that we may put this longstanding matter behind us and focus Broadcom’s energies and resources on our business objectives and the many market opportunities before us,” said David Dull, Broadcom’s general counsel.
Another shareholder suit filed by a group of prominent Orange County businesspeople is ongoing. The plaintiffs have the option to join the current settlement.
