Broadcom to pay $160.5 mn to settle options suit

LOS ANGELES, USA: Broadcom Corp (BRCM.O) said on Tuesday it will pay $160.5 million in cash to resolve an investor lawsuit accusing it of improperly backdating stock options but the California chip maker did not admit to wrongdoing.

The settlement, which must be approved by the federal trial judge in Los Angeles, dismisses investor claims against Broadcom's current and former officers and directors. The Irvine-based company will record the settlement amount as a one-time charge in fourth-quarter results.

Broadcom says the claims are without merit, and that it will continue to incur legal expenses related to at least one other ongoing lawsuit over stock-option backdating. Backdating involves setting a stock option price at a date in the past rather than the date it is issued and is legal when companies account for the price disparity in their books.

Stock options backdating at Broadcom led to a $2.2 billion restatement in 2007, and prompted civil and criminal cases against former top officers. Earlier this month, a federal judge in Santa Ana, California, dismissed criminal backdating-related charges against Broadcom's former chief executive Henry Nicholas III, former chairman Henry Samueli and former chief financial officer William Ruehle, citing prosecutor misconduct.

Broadcom shares were up about 1 per cent in after-hours trade at $31.62 on Tuesday after closing at $31.30 on the Nasdaq.