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SANTA ANA, California (Reuters) - A federal judge rejected a proposed plea agreement sentence of probation and a fine for Broadcom Corp co-founder Henry Samueli as too lenient, and postponed his sentencing.
Samueli, 53, pleaded guilty in June to a charge of making a materially false statement to U.S. Securities and Exchange Commission investigators following the company's restatement of $2 billion in compensation expenses last year.
Samueli's plea deal with prosecutors called for five years probation and $12.25 million in fines and forfeitures, but approval was needed from U.S. District Judge Cormac Carney.
Carney said in court on Monday the crime was serious and "could warrant a significant prison sentence."
"The court is not alone in concluding that a five-year probationary sentence does not capture the seriousness of Dr. Samueli's alleged misconduct," Carney wrote in a tentative ruling he made final in court.
"It would erode the public's perception of our justice system to accept a plea agreement containing an unprecedented payment of $12 million to resolve a criminal liability of one of four conspirators in an alleged $2.2 billion securities fraud."
Samueli's plea agreement came after growing government enforcement action against Broadcom and its top officers, including the June indictment of co-founder Henry Nicholas III on backdating and drugs charges.
The former chief financial officer, William Ruehle, also has been indicted on criminal charges related to backdating.
Ruehle and Nicholas have pleaded not guilty to the charges.
Carney directed prosecutors and Samueli's attorneys to release him from the plea bargain and negotiate a new deal.
Carney postponed the sentencing and set a September 29 hearing.
"My strong preference would be to defer any sentencing until after what happens to Dr. Nicholas and Mr. Ruehle," the judge said at the hearing in federal court in Santa Ana.
Reporting by Syantani Chatterjee; writing by Gina Keating' editing by Jeffrey Benkoe