Judge Rejects Rest Of Broadcom Backdating Case

GILLIAN FLACCUS

SANTA ANA, Calif. (AP) — A federal judge Tuesday dismissed all charges against the remaining two defendants in the government's sweeping securities fraud case against chip-maker Broadcom Corp., citing what he called "shameful" prosecutorial misconduct and a lack of evidence.

The dismissals were a stunning reversal that elicited gasps from the courtroom and tears from Broadcom's former chief financial officer and former CEO, who had faced the prospect of years in prison for their alleged crimes.

U.S. District Judge Cormac J. Carney dismissed the charges two days before the jury was to begin deliberations for former CFO William J. Ruehle, who had pleaded not guilty to 14 counts of fraud and conspiracy related to stock option backdating.

Carney also dismissed similar charges against Broadcom co-founder and former CEO Henry T. Nicholas III and challenged the government to defend its separate narcotics indictment against Nicholas, who is set to go on trial next year.

Those unrelated charges include allegations that Nicholas slipped ecstasy into the drinks of business associates, maintained a drug warehouse and concealed illegal conduct with bribes and death threats. He has pleaded not guilty.

Carney said evidence in the securities case shows prosecutors tried to influence the testimony of three key witnesses, improperly contacted witnesses' attorneys and leaked information about grand jury proceedings to the media.