TOP STORIES
Federal prosecutors are “strongly considering” criminal charges against former Broad-com Corp. chief financial officer Bill Ruehle and one other executive for their part in an options backdating scandal, according to The Wall Street Journal. Citing sources close to the probe, the Journal said prosecutors also are investigating former chief executive Henry Nicholas and Chairman Henry Samueli. No timetable was given. Ruehle, who stepped down from the Irvine chipmaker last year, was singled out by the company for his role in the misdating of options. His attorney has said no crimes were committed. The company also cited Nicholas and other former executives for a lack of controls and inappropriate grant practices. Last month, Broadcom revised financial statements for 1998 through 2005 with charges of $2.2 billion for the improperly accounted for stock options.
The Irvine Company is buying Equity Office Properties Trust’s former San Diego office buildings, marking a major expansion in the company’s second-biggest market. The Newport Beach-based landlord is buying the buildings from Blackstone Group LP, which completed its $39 billion buy of Chicago-based Equity Office Properties. Financial terms of the acquisition weren’t disclosed. The deal includes 17 buildings in San Diego and La Jolla (see story page 1).
Brea-based subprime mortgage lender ResMae Mortgage Corp. said it’s filing for bankruptcy reorganization and selling its assets to Switzerland’s Credit Suisse Group for $19 million. The market for subprime mortgages, which are made to borrowers with imperfect credit, “has recently been crippled” and “defaults by borrowers have risen,” ResMae said in its Chapter 11 filing. The asset sale to Credit Suisse is subject to bankruptcy court approval. ResMae said it plans to continue doing business during the asset sale to Credit Suisse.
Santa Ana-based technology distributor Ingram Micro Inc. posted record fourth-quarter results, gaining ground in sales in nearly every country in which the company operates. Earnings for the quarter rose more than 8% from a year earlier to $91.7 million on revenue of nearly $8.9 billion, up 11%. The results were in line with expectations.
Santa Ana’s SimpleTech Inc. sold its consumer flash memory business to San Mateo-based Fabrik Inc. for $43 million and changed its name to STEC Inc. The flash memory maker’s president, cofounder and director, Mike Moshayedi, who had been in charge of the consumer unit, has left the company after 16 years. He also stepped down from the board and was replaced by Vahid Manian, a senior vice president at Irvine-based Broadcom. All other employees of the consumer unit are set to join Fabrik, according to STEC.
Advanced Medical Optics Inc. last week said it swung to a loss in the fourth quarter on lower sales after recalling a contact lens solution late last year. The Santa Ana-based eye device and contact lens care maker posted a loss of $7.6 million in the quarter, compared to a profit of $2.3 million a year earlier. Analysts expected Advanced Medical to lose $2.3 million. Advanced Medical’s revenue was down 4% to $243.6 million on lower eye care product and laser vision correction sales, though better than what Wall Street expected. The company recalled nearly 3 million bottles of its Complete MoisturePlus contact lens care solution in November because of a contamination issue at its Chinese plant.
Bear Stearns Cos. last week said it completed its buy of the main operation of Irvine’s ECC Capital Corp., which makes loans to homebuyers with imperfect credit. The investment bank was set to pay $26 million for ECC’s loan origination business. But ECC actually ended up paying $7 million to Bear Stearns to close the deal. The company owed $33 million to Bear Stearns as part of money it was lent to make loans. ECC wasn’t able to sell the loans to investors for as much as it expected, resulting in the debt to Bear Stearns.
Irvine-based HireRight Inc., which does employee background checks and drug screening for employers, filed plans for an $86 million initial public offering. The company didn’t disclose how many shares it plans to offer up or the price range. The company plans to trade on Nasdaq under the symbol “HIRE.”
ECONOMIC INDICATORS
The median price of an Orange County home fell 4.8% to $600,000 in January from a month ago. Prices last month were unchanged from a year earlier and now are 6.6% below the county’s record, set in June, according to La Jolla-based DataQuick Information Systems. DataQuick revised its method for computing monthly totals in its latest figures. As a result, the county’s highest median price now stands at $642,500, a $3,500 decline from what previously was reported for June. Sales were off again in January, dropping 16.3% to 2,400 new homes sold, compared to a year earlier.
