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Administration November 11, 2008
Broadcom Backdating Probe Reveals Attorney Misconduct
November 11, 2008 (PLANSPONSOR.com) - An attorney
who worked for Broadcom Corp. co-founder and former CEO Henry
T. Nicholas III has pleaded guilty to evading a banking law
and says he will cooperate with the federal government in a
stock options backdating probe involving Nicholas.
Reported by Rebecca Moore
According to the Associated Press, Craig Gunther, who oversaw the private dealings of Nicholas for more than five years, pleaded guilty to evading a banking law that requires that cash transactions of $10,000 or more be reported to tax authorities. The AP said prosecutors claimed Nicholas regularly requested tens of thousands of dollars in cash, and Gunther would sign several checks of $9,500 to circumvent the reporting requirement.
However, Gunther said in a statement released by his attorney that he did not realize the practice was illegal.
Under sentencing guidelines outlined in the plea agreement, a sentence of a year or even probation could be imposed.
Nicholas and three other executives have been charged in what the Securities and Exchange Commission called a “five-year systematic scheme to secretly backdate stock options granted to virtually all Broadcom officers and employees.” (See Four Broadcom Execs Hit with Backdating Charges )
In April, the company agreed to settle charges of stock options backdating and pay a $12 million penalty (See Broadcom to Pay $12M to Settle Options Backdating Charges ).