A Toast 2 Wealth

This is an amazing true story about all-mighty Broadcom and its leader’s tale of option backdating, sex, drugs and lies.

Broadcom was co founded by Henry Nicholas III, holding a Ph.D  in electrical engineering. He helped develop the technology that allows for high speed internet, Bluetooth, iPhone, Nintendo Wii  and WiFi. Nicholas says “We essentially invented cable modems”, which was originally the efforts  of a system of building microchips for ’sending data over cable t.v. lines.’ While companies like Motorola and Scientific America took much of the credit for the devices used by millions across the world, one tiny little chip had Broadcom’s name labeled on them.

Nicholas was born in 1959 in Cincinnati to his father, a lawyer and mother, a teacher. Unfortunately, his parents separated  when he was 6 years old. He, his mother and sister moved to Santa Monica where he attended school and graduated high school to enlist in the Air Force Academy. After 3 years, he dropped out and attended UCLA to study electrical engineering.

Later, he met engineer Henry Samueli while they both worked for TRW. While Samueli went on to teach as a professor at UCLA in 1985, Nicholas later joined him and became his first student and earning his doctorate in 1998.

It was in 1991 when Samueli and Nicholas started Broadcom each investing $5,000. And from then, history was made. In 1999, Broadcom executives were making $110,000. Though many other companies were making much more, some came to Broadcom to take a pay cut and when it went public with its options, some became multi-millionaires. By the end of 2000, Broadcom was worth $10 billion.

As the dotcom community unraveled, Broadcom lost $8 billion dollars from Nicholas’ net worth. Though Broadcom Corp made $4.7 billion in sales in 2008, the career of Henry Nicholas is over.

Soon after the dotcom failure and his failing marriage, allegations and charges of option backdating and drug offenses surfaced almost immediately. This February, Nicholas is scheduled to face 21 federal charges of backdating options and distributing illegal drugs which could land him in prison for up to 360 years.

Can anyone believe a highly intelligent man like Henry Nicholas, responsible for that iPhone in your hand; that Bluetooth in your ear and that overly expensive Nintendo Wii racking the brain of your teenagers? Yes, it is he who could not handle the success or the decline of the techno down slide in Silicon Valley.

Those charges don’t stop there. They include civil and criminal cases against him for cocaine and Ecstasy use and prostitution. Nicholas adds that these allegations are false and he will be exonerated with his faith in the justice system. There is probably not enough faith in Silicon Valley that can get him out of this tangled web of mess.

His wife is seeking to split $1.5 billion in their divorce proceedings. Former Mrs. Nicholas has alleged in court that her husband had threatened to have her killed (but the actual word used was “whacked”). She also said that their children found drugs in both of their Orange County and  Colorado homes. Of course, Nicholas denies it and says they did not belong to him. Her marital tales go on to say that she caught him with another woman in a jacuzzi in a warehouse near the home. Prosecutors state he used this place as a “sex lair” to lure women.

The allegations don’t stop there. Prosecutors also say Nicholas held wild parties for Broadcom staff and their customers. It was said that drinks were spiked with Ecstasy and complimentary prostitutes for private parties. Nicholas is also being charged with the sale of drugs which he flatly denies and says prosecutors are concocting these stories up to nail him.

The story of a real life engineering scientist that brought technology to a level that it will continue to benefit, has come to a screeching halt. Though the accomplishments were great and many, it could have never been worth the humiliation from the backbiting and corrupt actions that is now causing him to this day.

Hopefully, we can all learn from the professor a lesson for the day: “As you are blessed with a brilliant mind to create world and life changing mechanisms, never let greed, hypocrisy, power, drugs and sex lead you to a living hell.”  - T.M. Phillips

Reference: http://www.forbes.com/forbes/2009/1019/forbes-400-rich-list-09-broadcom-nicholas-after-the-fall.html