The former chief financial officer and the co-founder of Broadcom Inc. pleaded not guilty on Monday to committing fraud by backdating stock options.
The ex-CFO, William Ruehle, denied 21 securities fraud charges in U.S. District Court in Santa Ana. Accused of filing false statements with the Securities and Exchange Commission, committing wire fraud, and falsely certifying financial reports, he is free on a bond of $2.6 million, the Associated Press reported.
Broadcom co-founder Henry T. Nicholas III pleaded not guilty to 25 counts contained in two indictments unsealed June 5. One of the indictments involves 21 charges alleging improper accounting for stock-option backdating at the microchip maker.
The other indictment accuses Nicholas of keeping a supply of illegal drugs, including ecstasy, to spike drinks of industry executives and Broadcom customers at parties he held at his homes in Southern California and Las Vegas and at a California warehouse, according to the AP. Ruehle does not face any drug charges.
U.S. Magistrate Judge Robert Block set a July 21 court appearance for Nicholas and Ruehle in the backdating case and a July 14 appearance for Nicholas in the drug case, Reuters reported.
Ruehle was Broadcom’s CFO from June 1997 until September 2006, when he retired. During his tenure, Broadcom grew from $37 million in revenue and about 200 employees in 1997, to more than $2.5 billion in annual revenue and nearly 5,000 employees. As of June 30, 2006, the company had no debt and held over $2.37 billion in cash, cash equivalents and marketable securities.
When in late 2006 the company canceled his options to purchase more than 1.8 million shares of Class A common stock, Ruehle stood to lose as much as $33 million.
The SEC last month charged Ruehle, Nicholas, chairman and chief technology officer Henry Samueli, and general counsel David Dull with fraudulently backdating stock option grants, failing to record billions of dollars of compensation expenses, and falsifying documents.