Broadcom will settle lawsuit for US$160m
Source: Agencies |
December 31, 2009, Thursday
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Print Edition
Print Edition
BROADCOM Corp will pay more than US$160 million in cash to settle a class action investor lawsuit related to stock option backdating, but did not admit wrongdoing.
The United States chip maker said on Tuesday that it would take the settlement, which still needs a judge's approval, as a one-time charge in the fourth quarter.
The deal would represent the second-largest upfront cash recovery from a company accused of stock option backdating, said Thomas A. Dubbs, attorney for the lead plaintiff, the New Mexico State Investment Council.
Managed care company UnitedHealth Group Inc paid US$895 million in 2008 to settle investor claims related to backdating.
The current Broadcom lawsuit was filed by investors who bought or acquired shares of the company's common stock between July 21, 2005 and July 13, 2006 and includes several million shareholders.
Former Broadcom Chief Financial Officer Bill Ruehle and co-founder Henry Samueli were named as defendants, as well as former general counsel David Dull and several other former and current executives and directors.
Broadcom said in its statement that it "steadfastly maintained" the claims weren't true, but added that settling the civil case will allow the chip maker to move forward.
Civil action
Earlier this month, a federal judge dismissed criminal charges against Ruehle and co-founder Henry T. Nicholas III and vacated Samueli's guilty plea to a single count of lying to Securities and Exchange Commission investigators.
United States District Judge Cormac J. Carney also dismissed an SEC civil action against Nicholas, Samueli, Ruehle and another former executive.
Also earlier this month, another federal judge granted final approval to a US$118 million partial settlement in a separate shareholder derivative case. Ruehle, Nicholas and Samueli remain as defendants in that case.
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