Stock options backdating lawsuits filed by shareholders against Broadcom Corp. face an uncertain future now that a federal judge has thrown out the government’s criminal case against two former executives of the Irvine, Calif., computer chip manufacturer.
Civil claims remain pending against Broadcom co-founders Henry Nicholas and Henry Samueli, as well as former Chief Financial Officer William Ruehle and former General Counsel David Dull. Lawyers for all four were in court on Tuesday when U.S. District Judge Cormac Carney of Santa Ana, Calif., dismissed criminal charges against Ruehle, who had been in trial since Oct. 23. The judge cited prosecutorial misconduct, finding that the government “distorted the truth-finding process” by, among other things, intimidating and influencing witnesses. He also cited a lack of evidence, noting that there was “considerable debate” about an accounting practice that was used by Broadcom and hundreds of major companies.
