The SEC has filed a civil action against four Broadcom executives and its General Counsel in connection with alleged options backdating activity at the company between 1998 and 2003. Click here to read the SEC’s complaint, filed in  the U.S. District Court for the Central District of California.  Two of the named defendants, Broadcom’s Chairman and Chief Technical Officer, Henry Samueli, and Broadcom’s General Counsel,  David Dull, stepped down from their respective roles at the company on the day the complaint was filed.  The other defendants are Henry T. Nicholas, Broadcom’s former co- Chairman and CEO, and William Ruehle, Broadcom’s former CFO.  The SEC complaint alleges  that the defendants played a key role in the wrongful retroactive dating of stock options in violation of accounting rules, allegedly resulting in a $2.2 billion write-down in 2007.

Notably, an earlier internal investigation into Broadcom’s alleged backdating practices concluded that Mr. Nicholas and Mr. Ruehle, along with former Vice President of Human Resources Nancy Tullos, bore primary responsibility for the alleged backdating liability, while Mr. Samueli and Mr. Dull were cleared of wrongdoing.  The SEC’s decision to charge Mr. Samueli and Mr. Dull is a rare example of where SEC conclusions are at odds with the findings of a company’s internal investigation.  Broadcom itself settled SEC backdating charges for $12 million in April of this year.  Ms. Tullo has similarly reached an individual settlement with the SEC.