BRCM founder called a greedy con artist by forbes:
forbes.com
That should have been the moment that I knew it was over. But I didn't want to hear. It wasn't just me, it was George Gilder, it was Henry Nicholas III of Broadcom who didn't want to hear. And I have a serious beef with Nicholas. Very serious.
What's that?
In 2001, as the market for his products was contracting severely, he continued to get his board to vote him options in Broadcom's stock, which he then traded in at market price, realizing $799 million, when he had to have known as CEO that the market price was about to collapse. And he wasn't the only one who did it--many people did it. Is this illegal? No, of course not. But is it ethical? No, it's highly unethical. But what he was involved in, and many CEOs were involved in at the end of the bubble, was a massive transfer of wealth from ordinary investors like me to insiders like Henry Nicholas III, or players, facilitators like Henry Blodget. And I think the options situation severely called out for federal regulation so this doesn't happen again.
And that's why I call the book American Sucker. Not only because I invested in a hot sector just before it was about to fall, but also because I thought that in a boom period, people who were already extremely wealthy would refrain from picking up every piece of loose change on the table. I was naïve about that, and millions of people were naïve about that.
See, by the late '90s, 50% of the American people were investing in the stock market in one way or another. That kind of trust in the market took 60 years to build up, from the reforms of first Roosevelt administration after the 1929 crash, through the war years and thereafter. By the '90s you had many people feeling that they could trust the market to function in an ethical way. They knew it was dangerous, but they didn't expect to be cheated. And CEOs hyping the value of their companies, using bogus accounting methods in order to keep quarterly results high and in some cases to cash in their own options at high prices, is a disastrous attack on the trust of ordinary investors. |
