Broadcom Corp. has agreed to pay $118 million to settle allegations of stock options backdating, in one of the largest such deals in a derivative action to date. The proposed settlement, subject to approval by U.S. District Judge Manuel Real of the Central District of California, would be the second largest in a derivative action involving stock options backdating, according to lead plaintiffs counsel Richard Heimann, name partner at San Francisco's Lieff Cabraser Heimann & Bernstein.

"It is significantly beyond in terms of actual dollar value what most if not all the derivative cases have settled for," Heimann said of the Broadcom deal. "The restatement in this instance was well in excess of $2 billion, meaning they had understated expenses and overstated revenues for a five-year period of that amount." Shareholders had contended that the individual defendants manipulated Broadcom's stock options from 1997 to 2007 to enrich themselves and that Broadcom issued false and misleading statements to the U.S. Securities and Exchange Commission. Broadcom was forced to restate its earnings downward by $2.2 billion.