Ex-Brocade CEO, Gregory Reyes gets new backdating trial
Convictions of Grey Reyes, former CEO of Brocade, were recently overturned in the Nation’s first criminal prosecution for options backdating. A judge granted Reyes a new trial when a prosecutor made false statements to a jury. Reyes was originally sentenced to 21 months in federal prison and fined $15 million after being convicted of 10 counts of misleading stockholders and federal regulators. The jury had found that he conspired to later grant dates of stock options issues to Brocade employees and took steps to falsify company documents to hide such transactions. Reyes denied any intent to deceive claiming that the Finance Department was aware of the backdating and he only relied on its documentation.
The prosecutor, Timothy Crudo, had made false statements when he told the jury that an employee of Brocade (Finance Department) stated she was unaware of backdating. The prosecutor was in fact aware that such high level department employees did know about the backdating considering they had told the FBI about their knowledge of it.
Brocade’s former Human Resources director, Stephanie Jensen was not so lucky. Her convictions were upheld, however a judge was ordered to reconsider her 14 month prison sentence on the grounds that it was somewhat based on erroneous finding of obstruction of justice. Jensen and Reyes were the first to ever be convicted of options backdating, a legal practice, however may be a considered a crime if options are misrepresented in reports to shareholders and the SEC. A recent study by the University of Houston found that improper backdating was more common and that most companies who have done it but have not been caught.
By Bob Egelko, Chronicle Staff Writer
A federal appeals court slammed a prosecutor for making false statements to the jury and overturned a Silicon Valley executive’s convictions Tuesday in the nation’s first criminal prosecution for concealing the backdating of stock options.
The Ninth U.S. Circuit Court of Appeals in San Francisco granted a new trial to Gregory Reyes, former chief executive officer of Brocade Communications Systems in San Jose. He was sentenced to 21 months in federal prison and fined $15 million in January 2008 after a jury convicted him of 10 counts of misleading stockholders and federal regulators.
If the prosecutors are having to lie or mislead the court to convict Mr. Reyes, why is there even a case against him? Do they even have anything on him at all? Backdating is not illegal.
I agree with Leslie. What case could it be and if there is no hiding the backdating, which the FBI investigation clearly showed, then what case do you have for criminality.
I thought the government was for the people, not against the people. What liars.
Do these prosecutors get punished for lying to the court? Because essentially they are doing the same thing they are accusing Greg Reyes of, misleading.
Just when you think you can trust that the government is going to seriously go after the corporate bad guys, this happens. Word of advice to the US Attorneys around the country, first find the real corporate bad guys so you don’t have to lie when prosecuting them.
Greg Reyes is definitely not the corporate bad guy the government thought they had. He is one of the best things that happened to out community.
At least the government’s prosecutor is getting called out by the courts. Maybe they’ll choose to make an “example” of him?
As a prosecutor how can you knowingly lie to the court and think you will get away with it?
Greg Reyes is a good man, a good leader and a good boss. He would have never knowingly put his position as CEO of Brocade on the line for stock option backdating or anything else for that matter. Brocade was important to him, he built it up from something so small.
Ok so they prosecutors lied about the facts of the case, a witness says that they felt forced to say what the prosecutors wanted them to say and the government tried Greg in two trial with two different theories of the case. If I have the facts straight then I remeber what my Grandfather used to say “What the hey?” which was his way of saying that someone was trying to convince him the obvious wasn’t the obvious.
When going into the court room did the two prosecutors, Reeves and Crudo, know that the plan was to lie? Did they discuss the outright lie they were about to tell the jury. Because facts prove that Crudo was well aware of Reyes’ reports to the finance department.
Reyes never misled stockholders or federal regulators FBI investigations proved this. I don’t know where these prosecutors got their information, unless the just planned to lie all along and make a mockery of the justice system?
They prosecution seeks to quell a defense motion to surpass statements that Greg made before his first trial. Either you have a case or you don’t. If this was such a strong case then why did they lie the first time or need to have prejudicial statements to bolster their case? Could it be because the US Attorney’s Office in this case wants to take revenge and not seek justice since the impugned their own honor?
It looks like the trial is in its second day of testimony. Came accross an interesting site from someone who sems to be following the case very closely. Check this site out-http://bit.ly/9i1Y2C
I came across an interesting opinion article from a Wall Street Journal Report that basically the reason the US Attorney is doing so poorly in findg a conviction that will hold up is because there is no crime. As a result of this fact the government’s lawyers are guilty of misconduct seeking a win versus the truth and justice.
I don’t believe it. I was reading a posting on this site by a guy following the trial and he said that the prosecution again. In the first trial they lied to the jury and left out crucial information. In this trial they mistated the facts about the statues regarding backdating options. Which means they lied again because the truth proves that they HAVE NO CASE!
http://bit.ly/db6TEX
It looks like the government’s prosecutors are up to their old tricks… Reyes’ lawyers just filed for a mistrial in the current case in San Francisco due the prosecutors misleading the jury.