Fake Memo Versus Real Investigation By CFIUS on Broadcom's (AVGO, $244.70) $19 Billion Merger Proposal

A fake memo about Broadcom’s merger with CA Technologies circulated among Washington lawmakers.

Semiconductor company Broadcom said on Wednesday that the letter - made to look like it came from the Defense Department - mentioned the need for the Committee on Foreign Investment in the United States (CFIUS ) to review the merger deal. "We have been informed by DoD officials that this memo is in fact a forged document," Broadcom said.

Broadcom announced its plans in July to acquire CA Technologies for $19 billion. The proposal is yet to receive regulatory approval from the European Union and Japan. While the U.S. antitrust officials did give their nod in August, a new law signed by U.S. President Donald Trump gives the CFIUS expanded authority to review deals that could potentially allow foreign companies access to sensitive technologies or those that might compromise U.S. national security.

Trump had previously rejected Broadcom's plans of $117 billion acquisition of another chipmaker Qualcomm,  following a CFIUS review. Broadcom at the time was moving its headquarters from Singapore back to the U.S.

Meanwhile, Senator Rand Paul asked the CFIUS to look into the merger - a call that has apparently nothing to do with the forged memo, according to Paul’s spokesperson. Paul said that CA Technologies' networks are "deeply embedded" in U.S. national security agencies and critical facilities including 29 nuclear reactors. "Just because Broadcom has changed their domicile to here doesn't mean we still shouldn't look at Broadcom," Paul said, while indicating the need to continue investigating any deal (including the Broadcom-CA merger proposal) that have potentially substantive implications for U.S. national security.

Broadcom however said, "Broadcom and CA Technologies are both American companies, and there is no basis in fact or law for CFIUS review of our pending transaction".