* Plea agreement called for probation, not prison
* Rejection of plea agreement not reviewable on appeal (Adds comment by Samueli’s lawyer, details on Anaheim Ducks ownership; recasts second paragraph)
By Jonathan Stempel
NEW YORK, Sept 24 (Reuters) - A federal appeals court dealt Broadcom Corp’s BRCM.O billionaire co-founder Henry Samueli a setback in his effort to avoid possible imprisonment for lying about his role in backdating stock options.
The U.S. Ninth Circuit Court of Appeals on Thursday said it could not reinstate a proposed plea bargain that called for Samueli to serve five years of probation, pay a $250,000 fine and pay $12 million to the U.S. Treasury Department.
Samueli, 55, had pleaded guilty in June 2008 to one count of falsely telling U.S. Securities and Exchange Commission investigators that he was not involved in backdating at Broadcom, an Irvine, California-based computer chip maker.
He accepted probation rather than face a possible five-year prison sentence, but U.S. District Judge Cormac Carney rejected the agreement on Sept. 8, 2008, saying it “does not capture the seriousness of Dr. Samueli’s alleged misconduct.”
Samueli declined to withdraw his guilty plea but appealed the order. He still awaits sentencing.
Thursday’s ruling did not address the merits of arguments by Samueli, who owns the Anaheim Ducks team in the National Hockey League. The NHL suspended him after his guilty plea.
Gordon Greenberg, a partner at McDermott Will & Emery LLP in Los Angeles representing Samueli, in a statement said “we will carefully review the court’s analysis and consider all our options.”
Stock options let holders buy shares in the future at fixed prices. Backdating involves retroactive grants on dates when a stock price was low, which can make the awards more valuable. Concealing the practice can inflate a company’s earnings.
Backdating at Broadcom led to a $2 billion restatement.
Co-founder Henry Nicholas and former chief financial officer William Ruehle have also been indicted over backdating, and Nicholas also on drug charges. Both pleaded innocent.
In Thursday’s ruling, a three-judge panel said Samueli’s case did not warrant an exception to the “broad rule” that orders in criminal cases cannot be reviewed until both a judgment and sentence are imposed.
Judge Ronald Gould wrote that it is “not at all clear” what Samueli’s sentence will be, and that Carney’s conclusion that the plea agreement was not in the interest of justice was “inescapably intertwined” with Samueli’s culpability, and thus not “completely separate” from the merits.
“Samueli may or may not have viable issues to present on appeal of his sentence once a final order has been entered,” Gould wrote. “We express no views on the merits of any such sentencing appeal.”
The case is U.S. v. Samueli, U.S. Court of Appeals for the Ninth Circuit (Pasadena), No. 08-50417. (Reporting by Jonathan Stempel; Editing by Richard Chang, Gary Hill, Tim Dobbyn)