Former Broadcom Chief Executive and company co-founder Henry Nicholas III pleaded not guilty on Monday to numerous charges related to an alleged stock options backdating scheme as well as several federal illegal drug charges, Reuters reported.
During a federal trial held at a federal court in Santa Ana, Calif., Nicholas, 48, who co-founded the computer chip giant, denied all 21 charges related to stock fraud and drug offenses, Reuters said.
In addition, William Ruehle, 66, Broadcom's former chief financial officer, also pleaded not guilty to the stock fraud charges during his hearing held at a federal court in Santa Ana, Calif., according to Reuters.
Nicholas, a billionaire who resigned as Broadcom's CEO in 2003, is scheduled to return to court later Monday afternoon to discuss returning to a rehabilitation program with conditions that include drug testing, home detention and electronic monitoring. His rehabilitation program was initially interrupted by his indictment and subsequent release on $3.3 million bail.
Both Nicholas and Ruehle face numerous charges in a 21-count indictment alleging that they had schemed to backdate millions of stock options and falsified documents that continued the fraud scheme from 1999 to 2005, which prosecutors say was one of the largest of its kind in history, Reuters said.
Meanwhile, a separate indictment alleges that Nicholas kept a sizable supply of illegal drugs, including ecstasy and cocaine, which was maintained for personal use and distribution, Reuters said. The indictment alleges Nicholas used some of the drugs to spike the drinks of industry executives and Broadcom customers.
Both Nicholas and Ruehle face a court appearance set for July 21 for the stock fraud case, while Nicholas alone faces a July 14 court hearing related to the drug charges. Both cases were set by U.S. Magistrate Judge Robert Block.
The charges for Nicholas and Ruehle follow on the heels of a lawsuit filed by the Securities and Exchange Commission against them and Broadcom Chairman and co-founder Henry Samueli and the company's general counsel last month, according to Reuters.
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