Court revives backdating lawsuit against ernst
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The district court held an evidentiary hearing and, after evaluating the extensive briefing and evidence presented, issued an order suppressing all evidence reflecting Ruehle's statements to attorneys from Irell & Manella LLP (“Irell”), Broadcom's outside counsel, regarding the stock option granting practices at Broadcom. Shortly thereafter, in mid-May 2006, an investor rights group publicly identified Broadcom as one of the corporations that appeared to have engaged in backdating.
O'Brien, United States Attorney, for plaintiff-appellant United States of America. Following a government investigation, Ruehle was criminally indicted for his involvement in an alleged backdating scheme that ultimately resulted in Broadcom's restatement of its earnings to account for approximately .2 billion in additional stock-based compensation expenses. IIn March 2006, the Wall Street Journal published the first of a series of articles called “The Perfect Payday,” which suggested that a number of public companies were backdating stock options granted to their employees.
Adkins, United States Attorney's Office, Santa Ana, CA; Thomas P. Sloan, Skadden, Arps, Slate, Meagher & Flom LLP, Los Angeles, CA, for defendant-appellee William J. We here explore the treacherous path which corporate counsel must tread under the attorney-client privilege when conducting an internal investigation to advise a publicly traded company on its financial disclosure obligations. Ruehle is the former Chief Financial Officer (“CFO”) of Broadcom Corporation, a California-based, publicly traded semiconductor supplier that came under intense scrutiny for its suspected backdating of company stock options. § 3731, and we reverse and remand for further proceedings.
The ruling affirmed that a plaintiff cannot simply ask the court to presume these facts based on findings in other actions involving the same underlying events.
Also, a defendant may be able to use a plaintiff’s early litigation tactics to bolster its own arguments.