Two arms of the federal government are weighing whether to pursue what’s left of their cases against Broadcom Corp.’s founders, according to a Thursday court hearing.
Prosecutors from the U.S. Attorney’s Office in Santa Ana—who saw a judge dismiss their criminal cases against Henry Samueli and Henry “Nick” Nicholas last month—said they’re awaiting word on proceeding with an appeal from the Justice Department.
In a set of stunning moves last month, Judge Cormac J. Carney threw out charges related to illegal stock options backdating against Samueli, Nicholas and former Broadcom financial chief Bill Ruehle on a court finding of prosecutor misconduct and a lack of evidence.
The judge also threw out a 2008 Securities and Exchange Commission lawsuit against them.
At Thursday’s hearing, which addressed a number of loose ends in the Broadcom cases, an SEC lawyer argued for allowing the suit to proceed before a skeptical Judge Carney.
“We believe that we should move forward,” lawyer Molly White said in court. “We think we still have a case.”
After the hearing, an SEC spokesman said the commission is considering whether to refile the suit and has seven days to do so.
The suit seeks a number of penalties for options backdating, including barring Samueli, Nicholas, Ruehle and former general counsel David Dull from serving as officers at a public company.
Samueli resumed an executive role with Broadcom last month after a plea deal he struck with prosecutors was thrown out and the SEC suit was dismissed. He had stepped back to an adviser role in 2008.
Nicholas, Broadcom’s former chief executive, left in 2003. Ruehle left in 2006. Dull left in 2008.
In early 2007, Broadcom, a maker of chips for computers and consumer electronics, took charges of $2.2 billion to past earnings to fix misdated options—the largest restatement bill of any of the some 150 companies involved in illegal stock options backdating.
In another move Thursday, the judge threw out a plea deal by former human resources executive Nancy Tullos, who sought a dismissal after the cases against the others were set aside.
He also threw out a plea deal by Craig Gunther, who served as chief operating officer of Nicholas’ family office and was charged with two misdemeanor counts of evading banking laws.
As part of Gunther’s plea, he agreed to cooperate with prosecutors on drug charges that also were filed against Nicholas.
In an expected move, prosecutors formally dropped drug charges Thursday with the judge dismissing the case.
The U.S. Attorneys also said they were dropping civil claims against Nicholas’ homes and a jet that stemmed from the drug case.
