(CN) - Federal prosecutors can use statements made by Broadcom Corp.'s former CFO William Ruehle to his attorneys about an alleged stock options backdating scheme, the 9th Circuit ruled. The Pasadena, Calif.-based circuit reversed a lower court's decision that found the statements were inadmissible because of attorney-client privileges.
Ruehle and Broadcom co-founder Henry Nicholas were indicted in June 2008 on charges of conspiracy and securities fraud for allegedly secretly backdating options from 1999 to 2005.
Broadccom hired the law firm Irell and Manella in 2006 to investigate its stock option grants, the opinion states. That review, which included interviews with Ruehle, prompted the company to restate its earnings to include $2.2 billion in previously undisclosed stock-based compensation to its employers.
Federal prosecutors investigated and interviewed the attorneys about their conversations with Ruehle.
The appeals court disagreed with Ruehle's argument that his statements were protected because the attorneys were working for his employer.
"Ruehle's statements to the Irell attorneys were not 'made in confidence,' but rather for the purpose of disclosure to the outside auditors," the opinion states.
"That he might regret those statements after later learning of the subsequent corporate disclosure to law enforcement officials is not material to the privilege determination."
Ruehle is set for trial Oct. 20 in Federal Court in Santa Ana, Calif.
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