The federal government has dropped its bid to appeal the December dismissals of illegal stock options backdating charges against the founders of Broadcom Corp.
The appeals arm of the U.S. Attorney’s Office in Los Angeles had until early June to decide whether to appeal the cases but said Friday it was dropping the cases.
Spokesman Thom Mrozek didn’t elaborate on the decision.
In January, prosecutors filed a notice of appeal indicating they planned to try to reverse the dismissals of charges against Henry Samueli and Henry Nicholas.
A decision to move forward has rested with the Office of the Solicitor General in Washington, D.C. Solicitor General Elena Kagan recently was nominated as a candidate for the Supreme Court by President Obama.
The government also dropped an appeal in the case of former Broadcom human resources executive Nancy Tullos, whose saw her plea bargain on one count of obstruction of justice thrown out in January.
The Broadcom cases stemmed from an investigation of backdated stock options at the Irvine chipmaker. In early 2007, the company restated several years of financial results to reflect $2.2 billion in charges for misdated stock options from 1998 to 2003.
The restatement bill was the highest of any company involved in the options issue.
Also charged was former chief financial officer Bill Ruehle, the only former or current Broadcom executive to go to trial.
At the end of Ruehle’s trial in December, U.S. District Judge Cormac Carney in Santa Ana threw out charges against Ruehle, Samueli and Nicholas in a stunning rebuke to prosecutors.
The judge cited a court finding of prosecutor misconduct and a lack of evidence in dismissing cases against the three.
The judge also threw out a Securities and Exchange Commission lawsuit that named Samueli, Nicholas and Ruehle.
Separate drug charges against Nicholas also were dismissed.
The end of the appeal effort closes an embarrassing chapter for the government.
The move was expected but wasn’t certain. In early May, the U.S. Attorney’s office contended it was preparing to go ahead with the appeal if it got the OK from Washington.
Prosecutors had until June 10 to file an opening brief to submit to the Court of Appeals for the 9th Circuit in San Francisco.
The dropped appeals effort ends the last bit of legal issues for Broadcom’s founders and former executives.
Samueli and Nicholas started Broadcom, the county’s largest chipmaker and one of its most high-profile companies, in 1991.
Nicholas was chief executive from Broadcom’s start until 2003. Samueli has served as chairman and has overseen chip development since the company’s founding.
Samueli stepped down from an executive role at Broadcom from 2008 to late 2009 and served as an adviser amid the legal fallout over options.
He resumed an executive post in December after the judge threw out his plea deal.
Tullos left the company in 2003. Ruehle left in 2006.
