Risk & Compliance

Another Broadcom Exec Receives Wells Notice

The company's general counsel could be sued by the SEC for alleged stock-option backdating.
Sarah JohnsonAugust 15, 2007

The Securities and Exchange Commission has sent David Dull, general counsel of Broadcom Corp., notification that it may bring charges against him related to its ongoing investigation into the company’s stock-option granting practices.

Earlier this week, Broadcom revealed Dull had received the Wells notice on August 8, less than three weeks after the SEC sent the same notices to the company and its co-founder, chairman, and chief technical officer, Henry Samueli. The notices indicate that the regulator’s staff intends to recommend a civil action for possible violations of securities laws. Recipients may respond in writing before the SEC staff makes any formal recommendation. In a regulatory filing, Broadcom said the company, Dull, and Samueli plan to respond to the SEC in writing.

Dull, who also holds the title of secretary and senior vice president of business affairs, has been with Broadcom since 1998.

One of at least 140 companies implicated in the backdating controversy by ongoing SEC scrutiny, Broadcom has taken what is considered the largest charge of any of them. To make up for stock option grants that were incorrectly dated from 1998 to 2005, the the semiconductor maker recorded a $2.26 billion charge in January.

The company has largely pinned blame for the backdating on three former executives: CFO William J. Ruehle, president and CEO Henry T. Nicholas III, and vice president of human resources Nancy M. Tullos.

In addition to the SEC’s formal investigation, Broadcom’s past stock option granting practices are under review by the Department of Justice. Samueli, who co-founded the company with Nicholas, did not receive any of the stock-option grants that are part of the federal probe, Broadcom has said.

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