Broadcom co-founder indicted on drug charges, backdating

Broadcom co-founder and former CEO Henry T. Nicholas III has been indicted for possession and distribution of drugs, and backdating stock options, a scheme which ultimately caused the company to write down $2.2 billion in profits last year.

The indictment alleges that the Nicholas drugged business executives and Broadcom clients, hired prostitutes and maintained a drug warehouse. In addition, Nicholas, along with former Broadcom CFO William Ruehle, was indicted on charges relating to stock-option backdating. According to the indictment, the back-dating schemes allegedly involved offering employees the option to buy stock at a future price that failed to recognise its true value.

If convicted, the four narcotics charges carry a maximum penalty of 20 years in jail. The charges of stock-option backdating could add up to a sentence of 340 years for Nicholas and 370 years for Ruehle.

For more:
- see this AP story

Related stories:
SEC: Broadcom officials back-dated stock options.
FBI: Comverse execs gain $8M from backdating

Sponsored by SNS Telecom

Shared & Unlicensed Spectrum in the 5G Era

Learn how shared and unlicensed spectrum will transform cellular communications in the 5G era. Featuring enabling technologies, key trends, business models, applications, spectrum availability, case studies and 5G NR/LTE equipment forecasts.