Broadcom founders charged

The SEC accuses Henry T. Nicholas III and Henry Samueli of a scheme to backdate stock options. As a result of the backdating, the SEC alleges, Broadcom had to restate its financial results and reported more than $2 billion in additional compensation expenses. "This egregious misconduct resulted in the largest accounting restatement to date arising from stock option backdating and warrants the significant sanctions sought from these individuals," said Linda Chatman Thomsen, director of the Division of Enforcement. The complaint, filed in U.S. District Court in Santa Ana, also names former CFO William J. Ruehle and General Counsel David Dull. The U.S. attorney's office also has launched an investigation into backdating at Broadcom. Here are stories from the LAT and AP. Also, here are some reactions from Bloomberg:

A team of lawyers and accountants hired by Broadcom's board in 2006 issued a report that "fully exonerated" Samueli, Gordon Greenberg, his attorney, said today in an e-mailed statement. "The SEC disregarded our written request to refrain from trying their case in the media," said Greenberg, a lawyer at McDermott, Will & Emory in Los Angeles. ``We look forward to representing Dr. Samueli in the proper forum, the courtroom." "Ruehle denies the allegations in the SEC's complaint," said his attorney Richard Marmaro of Skadden, Arps, Slate, Meagher & Flom LLP in Los Angeles. Marmaro added that the "non- cash compensation charges at the heart of the SEC's allegations were not material to investors or analysts." Attorneys representing Nicholas and Dull didn't immediately return phone calls seeking comment.