(Adds details, share price update)
WASHINGTON, May 14 (Reuters) - The U.S. Securities and Exchange Commission said on Wednesday it charged two current and two former top officers of chip maker Broadcom Corp BRCM.O with backdating stock options.
Shares in Broadcom fell 2 percent after the SEC said it filed a federal court complaint against co-founder, Chairman and Chief Technology Officer Henry Samueli and General Counsel David Dull, as well as Broadcom ex-Chief Executive Officer Henry Nicholas and former Chief Financial Officer William Ruehle.
The men schemed from 1998 to 2003 to secretly backdate stock option grants, which forced the company to eventually restate its financial results and report more than $2 billion in extra compensation expenses, the SEC said in a statement.
The SEC alleged that Ruehle and Dull each benefited personally from the backdating scheme by receiving and exercising backdated option grants that were in the money by more than $100,000 for Ruehle and $1.8 million for Dull.
The regulator said it is charging all four with violating or aiding violations of anti-fraud, record-keeping, financial reporting, and internal controls provisions of federal securities laws.
It also said Nicholas and Ruehle had signed false and misleading certificates related to Broadcom’s financial reports from 2002 through 2005. In addition, it charges that Ruehle and Dull violated securities ownership reporting provisions.
It said it is seeking permanent injunctions, civil monetary penalties and officer-and-director bars against all of the executives. It also said it was seeking reimbursement of bonuses and profits from stock sales from Nicholas and Ruehle.
Previously, the commission had brought enforcement actions against Broadcom and its former vice president of human resources, Nancy Tullos, in connection with the option backdating scheme.
The commission said the U.S. Attorney’s Office for the Central District of California and the Federal Bureau of Investigation had helped in the case, which it said it is still investigating.
Broadcom representatives were not immediately available for comment. Lawyers representing Dull, Nicholas, Ruehle and Samueli were not immediately available for comment.
Broadcom shares fell 55 cents to $26.92 after the news.
(Reporting by Julie Vorman and Sinead Carew in New York; Editing by Brian Moss)
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