The Ninth Circuit has thrown out Gregory Reyes' conviction for stock option backdating while he was CEO at Brocade Commuunications Inc. The court ruled that the U.S. attorney's office committed prosecutorial misconduct by saying during closing argument that the entire Brocade finance department was ignorant of the fraud. Assistant U.S. Attorneys Adam Reeves and Timothy Crudo shared closing arguments in the case.
"In representing the United States, a federal prosecutor has a special duty not to impede the truth," wrote Judge Mary Schroeder [pdf]. Judges Stephen Reinhardt and Louis Pollak, sitting by designation, concurred.
The court also upheld the conviction of Brocade HR director Stephanie Jensen, but remanded for resentencing, saying U.S. District Judge Charles Breyer should not have increased her sentence due to obstruction of justice by her attorney.
The decision is a huge blow to the Northern District U.S. attorney's office, as Reyes and Jensen were the only executives convicted at trial for stock option backdating .
Updated: We have a fuller, Recorder story at CalLaw.com now.
— Recorder staff
This is great news for Greg. He was very good for Brocade and the employees in general. There were a few that did not like Greg, and they were few; most of the employees were quite fond of him. When he left Brocade, the company went downhill. That was one of the biggest reasons I left Brocade. Greg was a personable guy who knew most of the employees by name.
Don
Posted by: Don Tremaine | January 21, 2010 at 08:13 AM
Congratulations Greg! We knew they would have nothing on you! What a wonderful man, and what a tragedy if he were to be taken away from our community.
Posted by: Emma | January 27, 2010 at 11:27 AM
I have met Greg at Brocade a couple of times - related to other business not the stock options. The meetings lasted about 20 min each. He had a couple of big deals on the plate going on at that time, so was distracted, but he was genuine and followed up on his commitment to get our deal done. The various ex Brocade employees I have spoken with still say good things about him as a person so I think this issue is going to not get a big way ahead.
http://www.gregreyesceo.com/
Posted by: Mitchelle Perez | March 08, 2010 at 11:57 PM
I haven't had the chance to meet gregory reyes personally though I find this whole situation really unfair since I know backdating is not a crime and a very common business practice nowadays.
Posted by: Diane Fox | March 26, 2010 at 08:59 AM
I share your opinion, backdating is only illegal when is kept as a secret and we all know now everyone was aware of the situation.
http://www.gregoryreyes.net/
Posted by: Craig Miller | March 26, 2010 at 09:34 AM