Broadcom boss will be jailed

IN A MOVE that will send a shiver through the IT business community, a federal judge has decided that conning cash out of shareholders using dodgy backdating will get you sent to jail.

Chip maker Broadcom had to write-down more than $2.2 billion of its value after investigators caught its co-founder Henry Samueli fiddling his stock options. It was the largest write-down in corporate history.

Samueli said he was sorry and negotiated a deal with the prosecution for five years probation and to pay $12 million back.

However US District Court Judge Cormac Carney said that the deal with prosecutors would erode the public's trust in the judicial system.

After all if you robbed a bank of $12 million and got away with probation just because you had a lot of cash, the great unwashed might think that the judiciary based its sentencing decisions on how much money you had.

The move has caught prosecutors on the hop, too. They hoped that by getting Samueli to plead guilty it would prevent a lengthy trial and send a message to the business community. Now it seems that if Samueli does admit anything he could face jail. It has asked the judge for time to renegotiate their plea deal or to allow the defendant to withdraw from the agreement.

Samueli could be a key witness against Broadcom's former chief financial officer, William Ruehle, or company co-founder Henry Nicholas, who are both accused of conspiracy and securities fraud. Nicholas is also charged with slipping ecstasy into the drinks of business associates.

Samueli must be fearing what happened to Greg Reyes – the former CEO and human resources chief for networking equipment maker Brocade Communications – who was sent down for 21 months and ordered to pay a $15 million fine. µ

L'Inq
AP