CFO’s fraud charges dropped

A federal judge Tuesday threw out the government’s case against Newport Beach resident and former Broadcom executive William Ruehle, scolding the prosecutors for their “shameful” conduct that tainted justice.

U.S. District Court Judge Cormac J. Carney dismissed the Securities and Exchange Commission’s case against Ruehle, 67, the company’s former chief financial officer, and Henry T. Nicholas III, Broadcom’s former chief executive. Both were accused of lying to the government about backdating stock options for employees.

“I have a solemn obligation to hold the government to the Constitution,” Carney said as he handed down his ruling.

Because a federal prosecutor had improperly intimidated three witnesses in Ruehle’s defense, the defendant would not get a fair trial, Carney said. Ruehle’s attorneys filed a motion Monday to have the case dismissed.

Last week, Carney threw out the case against local billionaire and company co-founder Henry Samueli, dismissing his guilty plea and charges for similar reasons. Broadcom is a leading computer-chip-manufacturing company based out of Irvine.

The judge said the U.S. attorney’s office had made a “mockery” of the system. The attorney’s office should have known by looking at the evidence that the accused did nothing wrong, Carney said, adding that the way Ruehle was treated was “shameful.”

Carney alluded to U.S. Attorney Andrew Stolper, without naming him.

The judge had determined earlier in the trial that Stolper committed misconduct by appearing to threaten one of Ruehle’s witnesses with perjury charges if his testimony matched a deposition that he gave to the SEC.

“The lead prosecutor somehow forgot the truth is never negotiable,” Carney said.