[JURIST] The US Securities and Exchange Commission (SEC) [official website; JURIST news archive] filed a civil complaint [PDF, text; SEC press release] in the US District Court for the Central District of California [court website] Wednesday against California-based microchip maker Broadcom [corporate factsheet] in conjunction with a scandal over the backdating of company stock options. The complaint alleges that from 1998 to 2003, Broadcom's former president and chief executive officer, Dr. Henry T. Nicholas, III, along with chief technical officer Dr. Henry Samueli, former chief executive officer William J. Ruehle, and general counsel David Dull omitted and falsified employee compensation documentation, resulting in incorrect financial statements. Samueli and Dull both took leaves of absence [Broadcom press release] from Broadcom on Wednesday, and Samueli also resigned from the Broadcom Board of Directors. AP has more.

Backdating a stock option grant typically allows the options to be set at a fraudulently-low exercise price. While the practice is not illegal on its own, it usually involves a violation of SEC and other federal reporting requirements [SOX guide]. Broadcom is the latest technology-related firm to come under SEC scrutiny for stock option backdating. In January, the former CEO of Brocade Communication Systems was sentenced to 21 months in prison and fined $15 million for the improper backdating of stock options. In October 2007, Mercury Interactive settled a similar case for a record $117.5 million. In February 2007, the US Department of Justice indicted the former general counsel of McAfee systems for stock option backdating. In January 2007, the US Attorney's office in San Francisco, CA opened a criminal probe into backdating at computer maker Apple Inc [JURIST reports].