OPEN COURTS -- Henry Samueli, the co-founder of Broadcom Corp., is fighting to keep the public out of a pending hearing before the 9th U.S. Circuit Court of Appeals in which he is seeking to reinstate a plea deal that he reached last year with prosecutors, reports Amanda Bronstad for the National Law Journal.
Under the proposed plea in the U.S. government's criminal case involving alleged stock options backdating at Broadcom, Samueli would have admitted making a false statement to the U.S. Securities and Exchange Commission regarding his role in the backdated stock options, which forced Broadcom to restate more than $2.2 billion in earnings in 2007. He would have served five years on probation and paid a $250,000 fine, plus $12 million to the U.S. Treasury.
On Sept. 8, 2008, U.S. District Judge Cormac Carney of the Central District of California rejected that deal on the ground that it would "erode the public's trust in the fundamental fairness of our justice system" and give the perception that "justice is for sale."
The judge identified Samueli as an unindicted co-conspirator -- referred to as "H.S." -- in an indictment that federal prosecutors brought earlier in 2008 against Broadcom's other co-founder and former chief executive, Henry Nicholas, and its former chief financial officer, William Ruehle, both of whom face life sentences if convicted on all counts.
"The Government has publicly levied very serious allegations of securities fraud against Dr. Samueli that, if true, warrant a significant prison sentence," Carney wrote at the time. "If there is any truth to these allegations, a probationary sentence does not adequately reflect or account for the seriousness of the underlying misconduct alleged against Mr. Samueli." He noted that a presentence report recommended that Samueli serve a year in prison.
Briefs filed by Samueli and federal prosecutors appealing the judge's decision have been sealed. Oral argument on the appeal is scheduled for Sept. 2 at the 9th Circuit's courthouse in Pasadena, Calif.