Things are looking up for the U.S. Attorney’s Office’s first stock options prosecution. Now that they have a prosecutor on the case, that is.
The situation had been a bit touchy for a few weeks in the case against two former Brocade Communications executives, ever since Assistant U.S. Attorney Christopher Steskal — who investigated and indicted the case and was preparing it for trial — decided he was leaving for Fenwick & West. Judge Charles Breyer had already shown skepticism of the government’s arguments: he recently criticized U.S. Attorney Kevin Ryan’s office during a hearing in the SEC’s civil suit against the former executives because, with Steskal on a tropical vacation, the office didn’t send another prosecutor to his courtroom to answer discovery questions in what the judge called a “watershed” case.
And then on Monday, Breyer scheduled a status hearing in the criminal case. With nothing in the docket to indicate the subject matter, it was unclear what he was hoping to find out — though safe to assume that he might be interested in whether the prosecution had a prosecutor.
As of Tuesday night, it did.
“The case is being transitioned to Tim Crudo,” said an office spokesman. That Assistant U.S. Attorney was last seen in court during the mistrial last year of two former McKesson executives accused of securities fraud. A former Latham & Watkins partner who came to the government in 2003, Crudo has scored notable victories in securities fraud cases against John Hickey, a real estate developer, and Zahra Gilak, who was convicted last year of participating in a $14 million stock manipulation scheme.
As one in the dwindling ranks of experienced prosecutors in the office, Crudo has plenty on his plate; he’s investigating other backdating cases, and later this year will be in charge of the retrial of former McKesson CEO Charles McCall and ex-GC Jay Lapine.
— Justin Scheck
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