Broadcom co-founder cleared after judge dismisses guilty plea, drops charge

Broadcom co-founder cleared in backdating probe

SANTA ANA, Calif. — Broadcom Corp. co-founder Henry Samueli arrived in court to testify for a former colleague with a promise of immunity and the prospect that the judge would eventually hand down a tough sentence for his own role in the stock options backdating case.

When he finished talking Wednesday, he had earned a new guarantee: his own freedom.

U.S. District Judge Cormac J. Carney made the announcement after Samueli, owner of the NHL’s Anaheim Ducks, spent two days testifying for the defense in the fraud trial of a former executive for the telecommunications chip maker.

“You have restored my faith in the criminal justice system,” an exhilarated Samueli told the judge in federal court in Santa Ana.

Samueli had pleaded guilty to making a material false statement to Securities and Exchange Commission investigators under a plea deal with federal prosecutors as part of a larger criminal probe into backdating at Broadcom.

The Irvine-based company was ultimately forced to write down $2.2 billion in profits in 2007 after stock options backdating was uncovered.

Carney’s decision came after Samueli testified in the trial of former Broadcom Chief Financial Officer William J. Ruehle, who is accused of conspiracy and securities fraud in the backdating probe along with former Broadcom co-founder Henry T. Nicholas III. Nicholas also faces drug-related charges. Both have pleaded not guilty.

Samueli, who was granted immunity to testify, told the court he lied to SEC investigators when he told them he wasn’t involved in awarding stock options at Broadcom. He also said he entered the guilty plea under pressure, hoping to avoid a massive indictment.

“I have listened to your testimony and I can envision that this is actually a very truthful response,” Carney said. “You are not going to be prosecuted for anything dealing with your SEC testimony.”

He added that Samueli’s record would be expunged.

Samueli had previously reached a plea deal with federal prosecutors to pay $12 million and get probation instead of prison, but Carney rejected the agreement as too lenient. He had planned to sentence Samueli after the trials for Ruehle and Nicholas.

Thom Mrozek, a spokesman for the U.S. attorney’s office, declined to comment on Carney’s decision.

Ruehle’s trial continues Thursday and could include testimony from federal prosecutor Andrew Stolper. Stolper acknowledged Wednesday that he leaked information about the Broadcom case to the media.