Lie Surprised by Backdating Re-Statement
Bookmark & ShareJuly 15, 2006
Source: Orange County Register
Broadcom Corp. will record more than $750 million in additional expenses dating back six years because it under-reported the cost of employee stock-option grants, the company said Friday. Broadcom's preliminary review determined that none of the company's top executives - co-founders Henry Samueli and Henry Nicholas, its two recent chief executives, Alan E. Ross and Scott McGregor, nor any board members - played a role in setting the timing or value of the options. Dozens of companies are under investigation for stock-option practices that benefited top executives. Analysts and Broadcom officials described the restatement as mostly an accounting issue, because few employees exercised their stock options. But ERIK LIE, the University of Iowa associate professor who pioneered research into corporate manipulation of stock-option costs, said Broadcom could face shareholder lawsuits and other legal challenges that will end up costing the company and its shareholders millions of dollars over time. Shareholder groups have filed three class-action lawsuits against Broadcom since June. "I was quite shocked at how large the number was," Lie said of the $750 million restatement.
Contact: Erik Lie, ,
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