He was convicted of securities fraud and related charges in 2007, but his conviction was overturned on appeal.
At the end of the day, all of this suggests that government prosecutors would do well to proceed with a more narrow focus than a win in this case might otherwise indicate.
]Federal prosecutors aren't buying former KB Home CEO Bruce Karatz's claim that he didn't defraud shareholders during the backdating scandal that rocked the company.
The Brocade case is the first options backdating case and was announced with great fanfare by the U. Attorney’s Office for the Northern District of California and the Securities and Exchange Commission in a joint press conference.
The allegations in the parallel criminal and civil enforcement actions suggested very strong cases.
Neal cited evidence that other company executives and board members had participated in backdating, and noted that changing accounting rules have provided conflicting advice on how to value stock options.
In a risky strategy, Neal opted not to call any witnesses for the defense.Reyes understood or knew much about the critical accounting issues involved.Equally surprising is the length of time which the jury took to come to a verdict.Wrapping up a three-week trial, a defense attorney argued to jurors Monday that prosecutors failed to prove former Brocade Communications CEO Gregory Reyes deliberately sought to mislead investors and regulators about the company’s practice of backdating employee stock options. Reyes was telling auditors and shareholders one thing and doing something quite different.” Backdating stock options to make them more valuable is not itself illegal, but companies must account for those options as a noncash expense against their earnings.But as both sides prepared to give the case to a jury in San Francisco federal court, prosecutors argued that the evidence clearly showed Reyes was guilty of “a dirty little secret.” Assistant U. Prosecutors contend that Reyes maneuvered to hide backdating at Brocade so that he and other option recipients could profit personally, without creating expenses that would hurt the company’s bottom line.The prosecutors claim such an instruction would have no bearing on the verdict, since Karatz lied during subsequent investigations, removing any good faith arguments.Tags: Adult Dating, affair dating, sex dating