The size of the figure, far greater than those reported by other companies in the sector, means it is unlikely to be ignored by the SEC or federal prosecutors, who have set up special task forces to investigate irregularities that are now thought to extend to 100 public companies quoted in the US.

Irvine, California-based Broadcom has to keep the SEC up to date with its findings and has also been contacted by the US Attorney’s Office for the Central District of California and asked to produce a subset of the documents requested by the SEC. It said it is working with government counsel to define the scope of its request and intends to cooperate.

It tried to explain its situation by saying it reflected its focus on providing entrepreneurial incentives to its employees, to attract top talent in a highly competitive market, which resulted in a much higher ratio of equity to cash in its compensation program, as compared with those of other, more mature technology companies.

It said it granted options to purchase more than 238 million shares of common stock to its employees between June 1998 and May 2003 and approximately 95% of those options were awarded to employees other than executive officers.

Broadcom revealed in July that its financial statements for the years 2000-2005 and for the first quarter of 2006 would need to be restated after a preliminary review showed the accounting measurement dates for certain stock-option grants awarded during the years 2000-2002 differed from the measurement dates. It said it expected to record additional non-cash stock-based compensation expense in excess of $750m, substantially all of which would be recorded in the years 2000-2003.

But it has now dug further back to June 1998 and has identified additional grants with incorrect measurement dates, and now expects the aggregate additional non-cash stock-based compensation expense will be at least twice the amount previously estimated, and said it could be substantially more depending upon the resolution of certain accounting issues.

Now the financial statements for 1998 and 1999 will also have to be restated and it said that all earnings press releases relating to periods after 1997 should not be relied upon pending completion of the restatements.

Broadcom said the magnitude of the additional expense to be recorded reflects the high volatility experienced by technology stocks during the affected period.

CEO Scott McGregor said the additional stock-based compensation adjustments are all non-cash and will not change reported revenues or net shareholders’ equity. He could not estimate when the inquiry will be completed.

Broadcom said it has identified no inaccurate measurement dates for equity awards made after May 2003. It also said it had identified no instances of inaccurate measurement dates relating to options granted to any current or former member of the board of directors. It said there was no unauthorized equity or any instance where an officer or director approved an individual equity award to himself or herself.