Posted on 12/16/2009 11:42:09 AM PST by CutePuppy
Accusing prosecutors of a "shameful" campaign to intimidate witnesses and obtain unjustified convictions, a federal judge threw out high-profile criminal stock fraud charges against Broadcom Corp. co-founder Henry T. Nicholas III and the company's former chief financial officer.
U.S. District Judge Cormac J. Carney issued his ruling Tuesday, less than a week after he overturned a guilty plea by company co-founder and Anaheim Ducks owner Henry Samueli.
The judge also dismissed a civil lawsuit that the Securities and Exchange Commission had filed against Broadcom executives, wiping away misconduct allegations that had plagued the Irvine-based microchip giant for years.
Samueli and Nicholas, both in the Santa Ana courtroom, embraced and sobbed. William J. Ruehle, the chief financial officer, thanked Carney and then hugged his attorney, Richard Marmaro. "It's the ultimate vindication for Broadcom," Samueli told reporters outside Carney's courtroom. "To see Broadcom's name smeared was so painful to me."
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In remarks that followed two months of testimony, Carney cataloged what he called the government's misdeeds. He said the government's treatment of Samueli "was shameful and contrary to American values of decency and justice." The judge called him "a brilliant engineer and a man of incredible integrity."
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Carney scheduled a Feb. 2 hearing to decide whether to dismiss additional criminal charges that Nicholas provided cocaine, Ecstasy and other drugs to friends and business associates. Nicholas has pleaded not guilty and has denied any wrongdoing. In his remarks, the judge suggested the government's conduct may have prejudiced its drug case against Nicholas.
The judge said the government unreasonably demanded that Samueli submit to as many as 30 "grueling" interrogations, falsely stated and improperly leaked to the news media that he was not cooperating in the government's investigation, and improperly pressured Broadcom to terminate his employment.
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(Excerpt) Read more at mobile.latimes.com ...
It’s about time.
The prosecutors gamed the system and now these guys can back to partying.
Its about time. - No kidding.
Subsequently, she agreed to plead guilty to a charge the judge called "questionable," and testified against Ruehle in a way the judge said seemed "scripted." She awaits sentencing, although her case may be affected by Tuesday's events. The judge said the government also pressured former Broadcom general counsel David Dull to testify in a way that favored the prosecution. Carney saved some of his harshest criticism for Assistant U.S. Atty. Andrew Stolper, the lead prosecutor in the case, saying at one point, "The lead prosecutor somehow forgot that truth is never negotiable." .....
"I'm sure there are going to be many people who are going to be critical of my decision . . . and argue that I'm being too hard on the government," the judge said. "I strongly disagree. I have a solemn obligation to hold the government to the Constitution. I'm doing nothing more and nothing less." Tuesday's court action was the latest in a series of setbacks for federal cases alleging the misdating of stock options. McAfee Inc.'s former general counsel, Kent Roberts, was acquitted last year in one such case. In August, an appeals court threw out the conviction of Brocade Communications' former CEO, Gregory Reyes, ruling prosecutors made improper statements to the jury. In reviewing the case, the judge singled out the way the government handled two witnesses. He said Nancy Tullos, a former Broadcom vice president of human resources who refused to cooperate in the investigation, was fired from a new job after a prosecutor called her employer and disclosed allegations against her.
This shows how bad this case (and, likely, many similar ones) really was : Carney's decision to dismiss Nicholas' options case was unusual because it came during Ruehle's trial, with no motion by Nicholas pending and was accompanied by the decision to dismiss the SEC lawsuit. .....
Death penalty cases usually get very high threshold of scrutiny, it’s usually the run-of-the-mill cases or the cases to which little outside attention is paid, or in which the defendant(s) can be stereotyped, that fly under the radar, where prosecutors feel they can do anything, with impunity, to pad their resumes.
Yet they consistently kept "missing" Bernie Madoff, who was right under their noses all the time, but who was really a good ol' boy, who was one of them.
Broadcom ruling shifts scrutiny - LAT, 2009 December 17, by Stuart Pfeifer and E. Scott Reckard: The Broadcom cases, among others, illustrate the struggles the U.S. attorney's office has encountered in prosecuting corporate executives for backdating stock options, a practice that makes it appear that their companies had fewer expenses and greater income than they really had. ..... Nathan J. Hochman, a former assistant attorney general, said prosecutors are always looking for the "most provable lies." But those are hard to find in options backdating cases ..... By February 2007, the FBI reported that it had 61 active options backdating investigations, and the Securities and Exchange Commission was looking at more than 100 companies for possible civil enforcement actions. The prosecutions that followed the FBI investigations grew to include executives at some major corporations. In addition to Irvine chip designer Broadcom, cases were brought against Brocade Communications Systems Inc. of San Jose, Comverse Technologies Inc. in New York and builder KB Home in Westwood. Then the cases began to fall apart. Last year, the former general counsel for computer security company McAfee Inc. was acquitted of options-backdating charges. Prosecutors won a conviction in the case of former Brocade Chief Executive Gregory Reyes -- only to see the conviction overturned on appeal. ..... On Tuesday, Carney dismissed backdating charges against Broadcom co-founder Henry T. Nicholas III and the company's former chief financial officer, William J. Ruehle, accusing federal prosecutors of intimidating witnesses and preventing the defendants from receiving a fair trial. He also said he had significant questions about the strength of the evidence presented during two months of testimony in Ruehle's trial. One problem has been the murky accounting rules for stock options. Companies can legally backdate options, as long as the practice is accounted for as an expense in regulatory filings. In 2007, Broadcom added $2.2 billion in options-related expenses it had failed to disclose in previous years. More than 200 other companies also have restated options expenses. "The accounting standards and guidelines were not clear, and there was considerable debate in the high-tech industry as to the proper accounting treatment for stock option grants," the judge said. "Indeed, Apple and Microsoft were engaging in the exact same practices as those of Broadcom." ..... The stunning dismissals of criminal cases against three former Broadcom Corp. executives in the last week focused on what the judge called "shameful" misconduct by prosecutors. But at the core, he had something more telling to say: Prosecutors couldn't prove the defendants did anything wrong.
bump
Well, as a former Attorney General of a certain state is supposed to have said, "You might want to put some ice on that."
My dentist said the same thing to me yesterday...after pulling 3 teeth....
The aforementioned Attorney General did it after a, uh, "drilling" operation, or so the story goes.
I was in need of a good laugh today, thanks......:O)
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