Broadcom co-founder testifies he didn't know backdating stock options was improper

[Robbien]

Source: LA Times

Henry Samueli, who co-founded Broadcom Corp. in a friend's garage and helped grow it into a leading microchip designer, took the witness stand Tuesday with an equally challenging task at hand: defending the company's backdating of stock options to a federal jury in Orange County.

. . .

Samueli said Broadcom's success was based largely on its highly skilled employees. In order to retain its employees, the company issued them stock options, which swelled in value during the tech boom of the late 1990s.

When the company went public in 1998, more than 70% of its employees became instant millionaires. Options are rights to buy shares of a company's stock at a specific price, usually set at the price on the date they are issued. Backdating stock options to an earlier date, when the stock price was lower, increases their value.

After securities regulators began investigating the practice earlier this decade, many companies were forced to revise their financial reports to reflect the increased option-related expenses.

In 2006, Broadcom had to restate its earnings to reflect $2.2 billion in options-related compensation costs, reducing the company's previously reported financial results.

Read more: http://www.latimes.com/business/la-fi-samueli9-2009dec09,0,3181295.story

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That's his official defense? He didn't know that forging the dates on official documents was wrong. That's what he is going with?

[Thor_MN]

1. Henry, some free advice

Because you probably don't know this either... If you drop something, bend at the knees to pick it up. That might be usefull where you are headed.

Honestly, he ought to get a harsher sentence for wasting the court's time with crap like that. "I swear, judge, I had no idea that the speed limit was 30 miles per hour in that neighborhood. I thought it was 110."

[Aragorn]

2. "ignorance

of the law is no excuse." end of trial.

[dysfunctional press]

8. yep.

next!

[tazkcmo]

3. No problem for the CEO.

It's ok when a mover or a shaker "cannot recall" or "was not aware" or "misspoke". They're not one of the masses to be fed to the prison system at first opportunity. No no no. The Beautiful People will NOT be held accountable.

[Richardo]

4. George Costanza: "Was that wrong?"

:eyes:

[DissedByBush]

5. Did the shareholders know?

That is the question.

It was part of normal compensation if they knew.

It was ripping off the shareholders if they didn't.

[Robbien]

9. No, the shareholders didn't know

The financial statements had to be restated to include the amount of money actually paid to execs. Over two billion dollars had to be removed from previously recorded profits.

[GodlessBiker]

6. Wow. He thought putting a false date on an official document was totally proper. Makes me...

wonder what else he did that is obviously wrong to everyone else but to him seemed perfectly okay.

[Javaman]

7. Using bullshit as your defense is never a winner strategy.

"It's my first day!" - Homer Simpson.