SEC Charges Broadcom Executives

SAN FRANCISCO - Federal regulators charged a handful of Broadcom'sBRCM current and former executives with stock option backdating Wednesday.

The civil complaint, filed by the Securities and Exchange Commission in federal district court for the Central District of California, seeks monetary fines and bans prohibiting the individuals from serving as officers or directors of public companies -- a penalty that could sideline Broadcom's current head of technology and its general counsel, both of whom were charged Wednesday.

Shares of Broadcom were off one penny at $26.95 in extended trading Wednesday.

Representatives for the company were not immediately available for comment.

The charges follow a $12 million settlement in April between Broadcom and the SEC relating to backdating allegations. Last week, Marvell TechnologyMRVL settled backdating charges with the SEC for $10 million.

In Wednesday's complaint, the SEC alleged that Broadcom co-founder and former CEO Henry Nicholas, former chief financial officer William Ruehle, current general counsel David Dull and current chief technology officer and chairman Henry Samueli fraudulently backdated employee stock options between 1998 and 2003.

According to the SEC, the individuals falsified documents to make it appear that stock options were granted at times when the price of Broadcom's stock was at a low point. The scheme allowed Broadcom to report artificially low compensation expenses, and consequently to restate $2 billion in additional expenses when the company came clean in January 2007.

Ruehle personally benefited from the backdating by receiving and exercising $1.8 million of "in-the-money" stock grants, the SEC said, while Dull pocketed $100,000.