Wednesday, 8 August 2007

Former Brocade Chief Convicted

A former Broacde Communications chief executive was convicted on 10 counts of conspiracy and fraud.

A jury in San Francisco convicted Gregory L. Reyes. Reyes was found guilty of 10 counts, including conspiracy to commit securities fraud, mail fraud, falsifying books, records and accounts, and making false statements.

The verdict ended a five-week trial in which Reyes was found accused of intentionally backdating the grant dates for hundreds of stock option awards without disclosing the move to investors.
Under US laws, Reyes could face up to 20 years in prison for the most serious charges as well as pay millions of dollars in fines.

Backdating is illegal if the company does not properly account for the discounted grants as an expense.

Reyes was the CEO of the San Jose, California-based data-storage network switch maker from 1998 to 2005 when the incident occurred.