Broadcom backdating scandal
I count no fewer than 38 top executives at 19 high-tech companies that have bit the dust over this stuff.
We're talking top executives at big-name companies like Apple, Altera, Broadcom, Brocade, Cirrus Logic, Comverse, KLA-Tencor, Maxim, Mc Afee, Rambus, Sanmina-SCI, Take Two, Trident, Verisign, and Vitesse. That's serious fallout considering that options backdating is legit as long as the company reports it and accounts for it accurately.
In a settlement announced concurrent with the complaint, Anderson - who neither admitted nor denied the allegations - agreed to pay back .6 million and never to do bad stuff again.
That seemed like a contradiction to me, but whatever.
Anderson got nailed because, according to the complaint, he should have noticed what Heinen was doing and either stopped it or reported the expense properly.
He also exercised and sold 750,000 back-dated shares.
You see, if you backdate stock options to a date when the price of the stock was lower, then the options are "in-the-money" when granted.
You'd think they'd be up to their eyeballs in rope.
Anderson had already retired in 2004 so, except for giving up some money and his board seat, he got off relatively easy, compared to Heinen.