Option Granting Practices and exploits Message Board

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Strategies & Market Trends : Option Granting Practices and exploits

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Nov 4 3:59 PM EST

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To: Glenn Petersen who wrote (14)	9/8/2006 12:22:11 PM
From: RockyBalboa	Read Replies (1) of 165

Broadcom Finds More Option Errors Friday September 8, 11:51 am ET Broadcom Uncovers Additional Stock Option Irregularities; Restatement to Double Prior Estimate IRVINE, Calif. (AP) -- Broadcom Corp., a supplier of chips used in communications devices, said Friday it may need to record expenses starting at $1.5 billion for stock option accounting flaws, double what it had estimated in July. The company said it has uncovered additional stock option grants with inaccurate dates. Broadcom is one of at least 79 companies under scrutiny for possibly backdating stock option grants, or dating options retroactively to coincide with share price lows -- a practice that increases the potential windfall for the recipient of the award. The company had uncovered grants awarded between June 2000 and 2002 in which the measurement dates differed from grant dates. The measurement date is the day the stock price on the option is determined, while the grant date marks the day when the employee receives the option. On Friday, the company said it found additional grants awarded between June 1998 and May 2003 that also had differing measurement and grant dates. As a result of the newly identified grants, the company expects to record expenses at least double what was previously forecast. In July the company estimated those expenses would exceed $750 million, implying the new total would start at $1.5 billion. The company said the audit committee's review of its option grants is ongoing, and it has not found any inaccurate measurement dates for grants awarded after May 2003. Shares of Broadcom fell 66 cents, or 2.57 percent, to $25.77 in morning trading on the Nasdaq Stock Market.

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