Ex-Broadcom chief indicted on drug and fraud charges

Broadcom co-founder Henry T. Nicholas III has been indicted for possession and distribution of drugs, and backdating stock options that caused the technology company to write down $2.2bn in profits last year.

The indictment alleges that the fast-living billionaire drugged business executives and Broadcom clients, hired prostitutes and maintained a drug warehouse.

Court documents claim that on one occasion Nicholas and others smoked " extensive amounts of marijuana during a flight on a private plane between Orange County and Las Vegas, causing marijuana smoke to enter the cockpit and requiring the pilot to put on an oxygen mask".

Along with former Broadcom chief financial officer William Ruehle, Nicholas was also indicted on charges relating to stock-option backdating between 1999 and 2005 and falsifying corporate records.

According to the indictment, the back-dating schemes allegedly involved offering employees the option to buy stock at a future price that failed to recognise its true value.

If convicted, the four narcotics charges carry a maximum penalty of 20 years in jail. The charges of stock-option backdating could add up to a sentence of 340 years for Nicholas and 370 years for Ruehle.