The federal indictment of former Broadcom Corp. chief and founder Henry Nicholas is rife with allegations of rampant drug use and paints the picture of a CEO gone wild.
The 18-page indictment, which was unsealed Thursday morning, alleges Nicholas bought, distributed and used prescription pills and street drugs, including Ecstasy, methamphetamine, cocaine and marijuana.
Some of the more egregious allegations include Nicholas spiking the drinks of business associates without their knowledge and filling prescriptions in another person’s name.
In one case, Nicholas’ alleged pot smoking on his private jet forced the pilot to put on an oxygen mask, according to the indictment.
For the most part, the drug indictment is a lurid sideshow to federal prosecutors’ dominant case over misdated stock options.
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The drug and options charges had little impact on shares of Broadcom, where Nicholas left as chief executive in 2003.
Broadcom’s stock was up about 2% Thursday on a recent market value of about $15 billion.
But Nicholas’ time at Broadcom comes up in the drug charges.
Some of the alleged illegal activities happened on the company’s home turf in Irvine while Nicholas was still in charge, the indictment says.
In 2001, prosecutors allege Nicholas directed a Broadcom employee to maintain a constant supply of about $10,000 in cash for his “personal use.”
Also in 2001, it alleges he directed a Broadcom worker to do a drug deal with a courier “in the lobby of Broadcom’s offices.”
Nicholas is later alleged to have paid the worker $1 million in hush money to keep quiet about the drug use.
In 2000, Nicholas is alleged to have spiked the “drinks of technology executives and representatives who worked for Broadcom’s customers.”
The allegations likely hold more legal ramifications for Nicholas than Broadcom.
But they could open the chipmaker up to shareholder lawsuits claiming that it should have disclosed to federal regulators that its chief executive was suspected of being under the influence of drugs.
