Legal News

Are Prosecutorial Missteps Helping Broadcom Defendants?

By Ashby Jones

Let’s get you caught up briefly on what’s going on out in Orange County, Calif., where the criminal trial involving Broadcom’s former Chief Financial Officer William Ruehle wrapped up on Thursday. Federal prosecutors have alleged that Ruehle conspired with Broadcom co-founders, Henry Samueli and Henry Nicholas, to backdate employee stock options. Click here for the LA Times article.

Ruehle is repped by Skadden’s Richard Marmaro, who, when coupled with his representation of Brocade’s former chief executive Greg Reyes, has carved out a nice little niche handling defenses in criminal backdating cases. In regard to Ruehle, according to the LAT, Marmaro has said his client made the same innocent mistakes that executives at about 200 other companies did before the rules governing stock option accounting were clarified in 2005.

Marmaro has moved to dismiss the case for lack of evidence, and Carney has scheduled a meeting for next Tuesday hearing to consider the motion. Otherwise, he has instructed jurors to return to his Santa Ana courtroom Dec. 17 for closing arguments.

Things might be looking up for Ruehle, at least if events from Wednesday provide any direction. The prosecution’s case took a significant blow Wednesday when Carney dismissed Samueli’s prior guilty plea to a single count of lying to the SEC. The judge said that though Samueli may have been evasive with SEC regulators, he did not believe he had provided materially false testimony, the basis for the one charge to which he had pleaded guilty. Samueli had pleaded guilty to the single charge last year and agreed to pay a $12-million fine with no jail time. Carney declined to accept that plea agreement, saying he wanted to sentence Samueli after listening to evidence in the other trials.

Otherwise, reports the LAT, it’s has been a rough two weeks for prosecutors in the Broadcom case.

Carney told the jury last week that assistant U.S. Attorney Andrew Stolper committed misconduct when he contacted the lawyer for a witness in the Ruehle case and told the witness he could face perjury charges if he testified the same way he had during an SEC deposition. Additionally, the prosecutor admitted in court Wednesday that he had improperly told reporters at the LAT and WSJ in 2007 that his office was having difficulty getting Samueli to cooperate during the options investigation.

His office removed him from the Samueli investigation in 2007 and he was not in court when Samueli testified this week.

Full post as published by Law Blog - WSJ.com on December 11, 2009 (boomark / email).