Charges Dropped Against Chipmaker's Former CEO

Prosecutorial misconduct cited in salacious case

By Jackson West
|  Thursday, Jan 28, 2010  |  Updated 5:13 PM PDT
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Charges Dropped Against Chipmaker's Former CEO

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Henry T. Nicholas III, second from left, at an event honoring police officers killed in the line of duty.

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Henry T. Nicholas III, billionaire cofounder and former CEO of chipmaker Broadcom, is a free man after cases against him alleging illegal stock option backdating and interstate drug trafficking has been dropped.

Nicholas was alleged to have improperly disclosed option backdating, a common practice during the dot-boom where companies awarded options to purchase equity dated back to when the stock price was lower -- thereby making the options more profitable when exercised by employees.

More interestingly, Nicholas was also alleged to have purchased, distributed and consumed massive amounts of cocaine, ecstasy and marijuana in both a purpose-built den in his Orange County home and on private jet flights to Las Vegas and other destinations.

U.S. District Judge Cormac J. Carney dismissed the financial charges against Nicholas and other Broadcom executives, including fellow co-founder Henry Samueli, who also owns the Anaheim Ducks franchise in the National Hockey League.

Carney's decision was based on improprieties by federal prosecutors, including allegations witness intimidation. Prosecutors then asked to dismiss the drug case, which Carney agreed to even though he felt that the evidence demonstrated that Nicholas did, in fact, have a drug problem.

The United States Attorney's Office in Los Angeles says that it plans to appeal the dismissal of the options case.

Jackson West loves how the wealthy, white Nicholas gets a pass on the drug charges when so many Americans are imprisoned every year for more minor offenses.

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