A Los Angeles judge gave the green light to a cadre of Broadcom Corp. shareholders on Monday looking to sue the Irvine-based chipmaker for options backdating.
U.S. District Judge Manuel Real rejected Broadcom’s request to dismiss the shareholder lawsuit, a report from Bloomberg News showed.
He ruled that a group of shareholders had met the criteria to argue that they took losses as a result of the backdating, according to the report.
The shareholders allege that reports of possible accounting issues relating to options grants in May 2006 caused a drop in the stock price.
In early 2007, Broadcom restated several years of financial results to reflect $2.2 billion in charges for misdated stock options. The restatement bill was the largest of any company involved in a stock options issue.
A lawyer for Broadcom at a hearing Monday said news of the options backdating broke in a May 18, 2006 story in the Wall Street Journal and didn’t result in a decline in the share price, the Bloomberg report showed.
Broadcom didn’t put out any statement about the suit and a request for comment from a company spokesperson wasn’t immediately returned.
The company had a recent market value of about $8 billion.
