SANTA ANA, Calif. (CN) - A federal judge dismissed the criminal stock-options backdating case against Broadcom Corp.'s co-founder and its former CFO, citing prosecutorial misconduct and witness intimidation. The dismissal of fraud and conspiracy charges against Broadcom's co-founder Henry Nicholas III and former CFO William Ruehle came just days after Judge Cormac J. Carney dismissed the conviction of Broadcom co-founder Henry Samueli.
Judge Carney said he did not believe Samueli committed a crime, despite his guilty plea.
Attorneys for Ruehle argued that the case should be tossed because Ruehle and other Broadcom executives made accounting mistakes but had no intention of cheating shareholders.
Judge Carney agreed, saying that submitting the case to a jury would make a mockery of justice, according to The Associated Press.
Attorneys for Ruehle and Nicholas said the accounting errors occurred because of complicated regulations of stock options. Many other companies made the same mistakes, Ruehle's attorney Richard Marmaro told the Los Angeles Times.
Prosecutors built a case against the Broadcom executives by alleging that they backdated options to make them more valuable for employees without disclosing the compensation in public filings.
Broadcom revised its reports to reflect charges of more than $2 billion.
Judge Carney scheduled a February hearing to decide whether he should consider narcotics distribution charges against Nicholas, which will address the only remaining charge in the case.