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Unh stock options backdating

Under what is known in legalese as a "rule 29" acquittal, that means that case cannot be retried. William Black, a former regulator and now white-collar law expert at the University of Missouri-Kansas, suggested to me that the big picture beyond Broadcom -- and which may also explain why so few have been criminally charged from the subprime mess -- is that the SEC was too lax for too long and the FBI has lacked the necessary resources to manage complex financial cases.

"I find Broadcom inexplicable," says Columbia University securities law professor John Coffee. "The judge in this case has ultimately adopted an absurd position, but for completely understandable reasons," Black says.

In the criminal backdating case of Brocade Communications (BRCD), CEO Greg Reyes' was convicted, but that was overturned on appeal and he is to be retried.

Perhaps most notoriously, Kobi Alexander, the former CEO of tech firm Comverse Technology (CMVT) recently contributed million to the settlement of a class action suit over backdating, but has been living on the lam from federal prosecutors in Namibia.

But a funny thing happened on the way to the big house: Every charge against Nicholas was recently thrown out, with the final act taking place last week when the SEC dropped its civil backdating case against him and several associates.

Suddenly, Nicholas is the poster child for something else: the nearing end of a crusade against options backdating that has produced few scalps.

And the company, which declined to comment on all this, recently settled a class-action suit related to the backdating for 0 million.NEW YORK (Market Watch) -- United Health Group on Monday said it agreed to acquire Sierra Health Services Inc.for about .6 billion, giving the health insurer a larger footprint in the fast-growing Southwest region and boosting its senior health-care capabilities.Among the many stunning results in the proceedings was the fact that Carney set aside guilty pleas by two former senior Broadcom executives including Nicholas' co-founder Henry Samueli -- he had previously copped to a single count of lying to the SEC.And one of the judge's most controversial moves was to dismiss the central backdating case against Broadcom's former CFO before it went to the jury, citing insufficient evidence. Attorney's office declined to comment beyond saying it is still considering an appeal.) While there is much to be debated on all sides of the Nicholas proceedings, one thing that is clear is that prosecutors are under immense pressure to get convictions against CEOs.Others, like United Health Group (UNH, Fortune 500) are only facing civil sanction from the SEC.And where there have been criminal charges they have had diverse outcomes: the former general counsel of computer security company Mc Afee (MFE) was cleared by a federal jury and the SEC, and is now suing his former employer for defaming him and making him a scapegoat."The district judge went well out of his way to immunize himself from appellate review -- and that suggests a degree of hubris." But it also shows how incensed Carney became at the U. Nonetheless, it's a complete vindication for Nicholas, whose case stood apart from the pack, because it was twinned with the now-withdrawn felony drug trafficking charges.That lurid case alleged he laced the drinks of employees of customers with narcotics and provided drugs and prostitutes at an underground "lair" he had built beneath his Orange County mansion -- and inspired such memorable tabloid headlines as BIG-$$ TUNNEL OF KINKY LOVE and ROCKIN' THE COKED-OUT 'ORGY' CAVE.Meanwhile, prosecutors have at least one more kick at the options backdating can: a criminal case against the former CEO of KB Homes (KBH) gets underway in a federal court in Los Angeles later this month.Get ready to see white collars loosen wide if this case fizzles as well.


  1. Feb 11, 2010. LOS ANGELES Fortune -- As CEO-gone-bad cases go, Henry Nicholas' had it all heavy allegations of sex, drugs, and rock and roll, as well as big-time corporate number-fudging. Because of widespread stock-option backdating at Broadcom, the chipmaker that Nicholas used to run, the company restated.

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