Billionaire Henry T. Nicholas III, pictured here in a 2004 interview with the Associated Press.

Former Broadcom CEO Pleads Not Guilty

June 16, 2008 05:53 PM
by Rachel Balik
Henry Nicholas III was recently indicted for stock fraud, using drugs and hiring prostitutes. He pleaded not guilty on Monday.

30-Second Summary

During a brief hearing in federal court in Santa Ana, California, Nicholas waived reading of his June 5 indictments, saying, "No thank you."

The billionaire, who made a fortune cofounding the Orange-County-based technology company, Broadcom, faces charges of stock fraud at the company. The Securities and Exchange Commission claims that Nicholas and his confederates were trying to “fraudulently backdate stock option grants, failing to record billions of dollars of compensation expenses and falsyfying documents to further the fraud."

The technology company's former chief financial officer, William Ruehle, also pleaded not guilty to the fraud charges.

Nicholas is also accused of using his money to give "party favors" like cocaine and ecstasy to business associates, sometimes without their knowledge. Nicholas had a secret den built under his house and hosted debauched parties there that not even his wife knew about.

Additionally, Nicholas was accused in 2002 of refusing to pay the construction workers who built his underground drug lair, but settled the case out of court. 

Headline Link: Nicholas pleads not guilty

Background: Nicholas indicted for fraud, drugs and sex


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