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SEC Looks at Broadcom
Staff Reporter -- Electronic News, 6/12/2006
Broadcom Corp. today said that the Securities and Exchange Commission is investigating the company's stock option granting practices.
The Irvine, California-based company had already initiated an independent review of its stock option grants on May 18, due to the number of other tech companies that have recently been accused of backdating stock options. On May 22, Merrill Lynch identified Broadcom as one of six companies that it noticed had displayed suspicious stock options grants and pricing.
Broadcom said in today's statement that the SEC was conducting an "informal inquiry based upon media reports," and that it intends to cooperate fully with the investigation.
Click here for more news on the unfolding stock option investigation.
"In light of the questions raised, and the high level of attention being given to option granting practices among technology companies and more broadly, we want our shareholders and employees to know that we are working proactively and with the highest degree of integrity to put all questions concerning this topic behind us," said Scott A. McGregor, Broadcom's president and CEO, in a statement .
Today’s news doesn’t seem to be worrying Wall Street. Shares of Broadcom closed Friday at $29.33 and opened this morning at $28.98, dropping 35 cents in pre-market electronic trading. However, shares had already climbed up $29.90 by 10:30 a.m. eastern time.
Broadcom becomes the latest company in a string of semiconductor players being investigated by the SEC. Among those include Altera, KLA-Tencor and Maxim.
Broadcom further assessed two lawsuits filed against the company's executives last month, both alleging misconduct in connection with option granting processes.
The company asserted that both of the claims are without merit and that Broadcom intends to defend them vigorously.
