Posts Tagged ‘Henry Nicholas III’
Wednesday, February 24th, 2010

A federal judge on Tuesday criticized defense lawyers for former KB Home Chief Executive Bruce Karatz for pressing misconduct allegations against federal prosecutors without sufficient evidence, The Los Angeles Times reports.

Karatz, who is charged with 20 counts of fraud and making false statements during an investigation of his company’s option grants, had accused federal prosecutors of manipulating witnesses in his upcoming trial. Judge Otis Wright II, of the U.S. District Court for the Central District of California, declined to pursue the matter, citing an “astonishing” lack of evidence to support the allegations, according to the Times.

Wright said he was troubled by the defense’s assertion that a judge’s recent finding of misconduct in the backdating case against Broadcom Corp. co-founders Henry Samueli and Henry Nicholas III pointed to possible foul play in the Karatz investigation, the Times reports.

The Karatz trial, scheduled to begin March 9, is a chance at redemption for the Justice Department, after a series of disappointments in previous stock options backdating cases — most prominently, the Broadcom matter.

Assistant Attorney General Lanny Breuer, the head of the Criminal Division, said in a recent interview with Main Justice that the department was taking a “hard look” at the backdating cases. But he cautioned that the outcome of the Karatz trial would not necessarily determine the department’s course.

“We take a hard look — whether we’re talking about stock options cases or whether we’re talking about honest services cases, where it’s our obligation to assess the state of the law,” Breuer said. “That’s what we’re doing in the Criminal Division and that’s what the U.S. Attorneys’ offices are doing. Once they do that I don’t think there’s any one outcome that necessarily flows from that.”