Brocade backdating options
Many of the criminal options backdating cases announced so far involve allegations of personal gain by the defendants. Other criminal backdating cases, many of which have resulted in guilty pleas, have been more straightforward than Brocade, Bartlett said. The jury’s decision is likely to influence the roughly 100 pending criminal investigations into backdating, a practice that prosecutors say enriched executives and other employees at the expense of shareholders through accounting manipulations. Justice Department has filed criminal charges against former executives of companies including Mc Afee Inc MFE.
For example, former Monster Worldwide Inc (Comverse Technology Inc’s CMVT. District Court in San Francisco expressed doubts about the government’s case in a hearing last month after defense attorney Richard Marmaro asked him to acquit Reyes in mid-trial, citing insufficient evidence. An acquittal could make prosecutors think twice about bringing criminal charges in other backdating cases in which personal gain was not a motive and evidence of intentional wrongdoing is not obvious. N, Comverse Technology, Monster Worldwide and Engineered Support Systems Inc. attorney who first headed the Brocade case, has left the office for a job in private practice.
PK former CEO, Jacob “Kobi” Alexander, is in Namibia fighting extradition to the United States to face charges that he and others backdated millions of stock options for themselves and other employees when the shares were trading at lows. “What evidence is there that he actually understood the accounting implications of the backdating of the stock? “It is an area that is relatively new in terms of the charges out there,” conceded Michael Garcia, the U. Attorney for the Southern District of New York, in a July 25 Reuters interview.
He added, however: “I am fairly confident that we are going to see more options charges.” Complicating criminal backdating prosecutions of Silicon Valley companies are recent personnel changes in the San Francisco U. Attorney’s office, which took a leading role in such cases early on.
Brocade's former vice president of human resources, Stephanie Jensen, was also charged with 12 counts. The government alleges the two illegally concealed that Brocade was awarding "in the money" grants — or options that already had value when they were given, thus requiring the company to incur compensation expenses.
Two mail fraud charges were later dropped for both defendants. By keeping the charges off the company's financial records, prosecutors argued, the executives misled investors about the true profitability of San Jose, Calif.-based Brocade, which makes switches and software used to connect corporate servers and data storage systems. Attorney Tim Crudo countered that the government doesn't have to prove that Reyes knew which securities laws he was breaking, just that he knew what he was doing was wrong.
Some defense witnesses testified that options-related expenses weren't even relevant in calculating Brocade's core profitability and measuring the success of its operations. He said Reyes knew Brocade's financial reports and board meeting records were incorrect but signed them anyway and that he also lied to auditors about the company's options practices.
In May, Brocade and Mercury Interactive LLC, now owned by Hewlett-Packard Co., became the first two companies to pay fines to settle allegations by the Securities and Exchange Commission of civil fraud accompanying backdating. On Monday, the SEC entered consent judgments against Brocade Chief Financial Officer Antonio Canova and Stephanie Jensen, the former president of human resources at the data storage networking company, ending litigation over their role in the backdating scandal. Securities and Exchange Commission has settled its civil suit against two of the former executives allegedly responsible for backdating stock options at Brocade Communications Systems Inc.The lack of a personal financial motive distinguishes the case from more-notorious securities-fraud cases such as Enron Corp ECSPQ. “If I were a prosecutor, I’d be reluctant to bring a case against a guy who didn’t make any money on the deal,” said Joseph Bartlett, an attorney at Fish & Richardson in New York and a former acting professor at Stanford Law School.“I don’t think it’s in the same category as the Enron or Worldcom game,” where executives reaped large personal gains. Securities and Exchange Commission is also investigating backdating, and about 100 companies have announced restatements totaling more than billion to account for past options grants.The case against former Brocade Communications Systems Inc BRCD.Tags: Adult Dating, affair dating, sex dating