• "One of the nation's premier plaintiffs' firms."

    American Lawyer

  • "Representing the best qualities of the plaintiffs' bar."

    The National Law Journal

  • "Their effective and caring advocacy for clients has earned Lieff Cabraser its first-class reputation."

    The Daily Journal
  • NLJ Hot List icon

  • Lieff Cabraser: follow us on (social media links)

    Visit us on Facebook
    Follow us on Twitter
    View our YouTube channel
    Read our LinkedIn profile
    Read our Tumblr
    Visit us on Google+

Case Center

Broadcom

  • Issue: Settlements valued at $197.5 million
  • Result: Settlements valued at $197.5 million
  • 2011

In re Broadcom Corp. Derivative Litigation

Lieff Cabraser served as Court-appointed Lead Counsel in a shareholders derivative action arising out of stock options backdating in Broadcom securities. The complaint alleged defendants intentionally manipulated their stock option grant dates between 1998 and 2003 at the expense of Broadcom and Broadcom shareholders. By making it seem as if stock option grants occurred on dates when Broadcom stock was trading at a comparatively low per share price, stock option grant recipients were able to exercise their stock option grants at exercise prices that were lower than the fair market value of Broadcom stock on the day the options were actually granted.

On December 14, 2009, U.S. District Judge Manuel L. Real granted final approval to a partial settlement in which Broadcom Corporation's insurance carriers paid $118 million to Broadcom. The settlement released certain individual director and officer defendants covered by Broadcom's directors' and officers' policy.

Plaintiffs' counsel continued to pursue claims against William J. Ruehle, Broadcom's former Chief Financial Officer, Henry T. Nicholas, III, Broadcom's co-founder and former Chief Executive Officer, and Henry Samueli, Broadcom's co-founder and former Chief Technology Officer. On May 23, 2011, the Court granted final approval to a settlement with these defendants. The settlement provides substantial consideration to Broadcom, consisting of the receipt of cash and cancelled options from Dr. Nicholas and Dr. Samueli totaling $53 million in value, plus the release of a claim by Mr. Ruehle, which seeks damages in excess of $26 million, leading to a total settlement valued at $79 million.

Coupled with the earlier $118 million partial settlement, the total recovery in the derivative action was approximately $197.5 million, constituting the third largest in a derivative action involving stock options backdating.