Report: Ex-Broadcom CEO probed over drugs

NEW YORK (CNNMoney.com) -- The stock option probe at Broadcom has taken an odd turn, with the focus shifting to the chipmaker's ex-CEO Henry T. Nicholas for alleged drug use and other excesses, the Wall Street Journal reported Friday.

Kenji Kato, a former personal assistant and bodyguard to Nicholas, filed a civil lawsuit in Los Angeles Superior Court earlier this year claiming Nicholas forced him to use illegal narcotics and said his former boss spiked the drinks of clients and offered prostitutes to customers, the newspaper said.

"I would see him put powdered ecstasy pills into the drinks of his customers," the Journal said Kato claims in a court declaration. "Other times, when we were at trade shows in Las Vegas, it was normal for Nick to request and send prostitutes to his customers to entertain them."

Kato said he worked for Nicholas on and off from 1999 to 2006 and is seeking a $3 million settlement, plus unspecified damages for his forced resignation, according to the report, which said he originally sought a $9 million payment.

Nicholas' attorney strongly denied the allegations and told the Journal that Kato fabricated the events to extort money from Nicholas. He said there were no prostitutes and the drug-spiking allegations are "ludicrous," telling the Journal no such things happened.

The suit comes after Broadcom (Charts) admitted to widespread backdating of stock options that resulted in a $2.2 billion charge against earnings - the largest restatement so far in the federal probe of companies improperly backdating stock option grants.

Calls by CNNMoney.com to Broadcom for comment were not immediately returned.