Legal News

Judge Says No to Broadcom Co-Founder?s Plea Deal

By Dan Slater

Henry Samueli in 2005. Photo: Orange County Register

Not so fast. U.S. District Court Judge Cormac J. Carney — a former All Pac-10 wide receiver at UCLA — has put the kibosh on a plea deal that had called for Broadcom co-founder Henry Samueli to get probation rather than prison for his role in the company’s alleged stock-options backdating scandal. Here’s LB coverage of the plea deal.

Reached in June, the plea deal between prosecutors and Samueli called for five years’ probation and $12 million in payments. But Judge Carney said that would erode the public’s trust in the judicial system. “The court is not alone in concluding that a five-year probationary sentence does not capture the seriousness of Dr. Samueli’s alleged misconduct,” he wrote. Here’s the WSJ story.

Samueli pleaded guilty to lying to investigators from the SEC in connection with the agency’s investigation of the Broadcom. Representatives for Mr. Samueli and the U.S. attorney’s office in Los Angeles declined to comment.

What are the options for prosecutors and Samueli in the wake of Carney’s ruling? They asked the judge for time to renegotiate their plea deal to address the court’s concerns, including the fact that Samueli didn’t agree to cooperate with prosecutors in cases against other former executives, such as former CFO, William J. Ruehle, or co-founder Henry T. Nicholas III, who were charged earlier this year with securities fraud. They pleaded not guilty.

Samueli could also withdraw from the agreement, in which case he could be criminally charged, or he could agree to stick with the current agreement and let the judge sentence him. The statutory maximum sentence for lying to the SEC is five years in prison.

Full post as published by Law Blog - WSJ.com on September 09, 2008 (boomark / email).