Broadcom Exec Settles Stock Option Case

A former human resources executive at Broadcom will pay $1.4 million to settle claims she participated in a scheme to backdate stock options at the chip maker, the Securities and Exchange Commissions said yesterday.

While Nancy M. Tullos, 56, agreed to pay $1.3 million in disgorgement and prejudgment interest, she will not turn over any money because the penalty will be canceled out by the loss of her Broadcom stock options, the SEC said. Tullos will pay a $100,000 fine.

Tullos did not acknowledge wrongdoing by agreeing to settle in the civil matter. Earlier this year, she pleaded guilty to one count of obstruction of justice as part of a plea arrangement with federal prosecutors. She is expected to cooperate in an investigation of the founders of Broadcom, Henry T. Nicholas III and Henry Samueli, who have been called “unindicted potential co-conspirators” by prosecutors.

In January 2007, Broadcom reduced previous financial results by $2.2 billion to account for improperly backdated stock options.

The SEC said it was the largest correction resulting from scores of investigations into how corporations accounted for backdating option grants to make them more valuable.