Compiled by Julie Leupold
TOP STORIES
Henry Samueli, cofounder of Broadcom Corp., resigned last week as chairman and took a leave of absence as chief technical officer after the Securities and Exchange Commission charged him and other current and past executives with a “massive fraud scheme” to backdate stock options. Also named in the civil suit were cofounder and former chief executive Henry Nicholas, former chief financial officer William Ruehle and current general counsel David Dull, who also took a leave of absence. The SEC complaint alleges they engaged in “a scheme from 1998 to 2003 to fraudulently backdate stock option grants and for failing to record billions of dollars of compensation expenses and falsifying documents.” Samueli will remain a technology adviser to Chief Executive Scott McGregor and still owns 30% of Broadcom’s voting stock. A separate criminal investigation of options backdating at Broadcom is ongoing with indictments widely expected.
TECHNOLOGY
Jeff Benck joined Costa Mesa-based Emulex Corp., two months after abruptly leaving rival QLogic Corp. of Aliso Viejo. Benck, an IBM Corp. veteran, is joining Emulex as executive vice president and chief operating officer. He’ll oversee engineering, marketing, operations and sales at the maker of electronics for data storage networks. He’ll report to Emulex Chief Executive Jim McCluney.
Fountain Valley’s Kingston Technology Co., the biggest maker of memory products, widened its market share last year for sales of circuit boards with memory chips that go into computers. Kingston had about 24% market share for 2007 sales of what are called memory modules. That’s up from 16% in 2006, according to figures released last week by Taiwan-based memory chip tracker Dramexchange.
A large shareholder in Santa Ana-based MSC.Software Corp. said last week the maker of industrial simulation software should “explore strategic alternatives”,including a possible sale. New York-based investment firm Elliot Associates LP, which owns a 9% stake in the company, made the recommendations in a Securities and Exchange Commission filing.
HEALTHCARE
Shares of Valeant Pharmaceuticals International closed up more than 8% last week on positive trial results for retigabine, an anti-epilepsy drug. Aliso Viejo-based Valeant, with a recent market value of $1.4 billion, said retigabine reduced seizures in trial participants. Valeant’s study looked at a pair of daily doses of retigabine in patients who also were taking other anti-epileptic drugs. Valeant said it plans to submit retigabine for Food and Drug Administration and European Union approval before the end of the year.
EDUCATION
Irvine Unified trustees voted last week to formally cut 251 temporary and part-time teachers and other workers. But district officials could rehire most of these teachers in coming weeks. Officials have been considering increasing class sizes in the third and ninth grades, cutting special education costs and reducing science programs to trim $12.5 million from the budget. Nearly 2,000 local educators are expected to be laid off or otherwise terminated by 16 of Orange County’s 28 districts.
REAL ESTATE
Irvine-based homebuilder Standard Pacific Corp. posted another big loss for the first quarter on nearly $200 million in write-offs in the value of unsold homes and undeveloped land. The company said early last week it lost $216.4 million in the first quarter, compared to a loss of $40.8 million in the year-ago period. Revenue fell 47% to $348 million. The company said it is considering a sale among other options.
Two bankers employed by Newport Beach-based developer Igor Olenicoff are under criminal indictment for allegedly helping the Olen Properties Corp. founder and president hide assets and evade taxes. Bradley Birkenfeld, a U.S. citizen, and Mario Staggl of Liechtenstein are charged with one count of conspiring to defraud the U.S., according to a criminal indictment unsealed early last week in Miami. The two bankers are alleged to have created fictitious trusts, bogus corporations and other false entities to hide some $200 million of Olenicoff’s assets. They each face up to five years in prison if convicted. Olenicoff is not charged in the indictment.
Orange County has agreed to postpone collecting fees for housing construction projects, without any analysis or discussion about what effect the move will have on the county’s finances. The move is designed to help builders cope with the slowed housing market.
FINANCE
Financial data released by Newport Beach-based Downey Financial Corp. sheds light on further loan losses for the thrift operator. For April, Downey reported more than 13% of its $13 billion in loans were in default, up from nearly 12% at the end of March and continuing a trend this year. About 4.5% of its assets, mostly mortgages, have been restructured to help borrowers struggling to pay on option adjustable-rate loans that have been resetting at higher interest rates. Downey’s adjustable-rate loans now make up 65% of its portfolio, down from 81% a year earlier.
