A class action lawsuit has been filed against Broadcom Corp. (NASDAQ:BRCM) and certain officers in United States District Court for the Central District of California on behalf of shareholders of Broadcom who acquired their shares between July 31, 2000 and March 6, 2001.
According to the complaint, the Company's reported revenue growth of 129% and 132% for the third and fourth quarter of fiscal 2000, respectively, over the prior year, as well as sequential quarterly revenue growth of 30% and 18%, were materially false and misleading because defendants overstated the Company's true revenues, growth rates and other financial performance by failing to properly disclose and account for the fact that the Company had purchased part of its revenues by giving customers millions of dollars worth of warrants for Broadcom stock in return for their orders. Specifically, the complaint alleges that, during its acquisitions of other companies, Broadcom had these companies go to their customers and get agreements for future product orders in return for warrants for the stock in the companies, which Broadcom agreed to and did convert to warrants for its own stock as part of the acquisitions. Furthermore, Broadcom would not account for these customer warrant transactions in accordance with Generally Accepted Accounting Principals ("GAAP").

Update

The case has been settled. Proof of claim forms are due by October 5, 2005. Forms received after that date will be processed but cannot be guaranteed to be accepted by the court. Notice of settlement and proof of claim forms can be downloaded at www.gilardi.com.

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