Gregory Reyes, former chief executive of Brocade Communications, was convicted on all 10 counts of securities fraud, conspiracy and making false statements in the first stock options backdating case that has gone to trial.
The verdict came after a five-week trial in which jurors heard testimony about Reyes' involvement in changing the dates of stock options to benefit employees. He faces a possible 20-year prison term and up to a $5 million fine when he is sentenced on November 21. The jury deliberated for five-and-a-half days before convicting the former executive.
The conviction is a concern to other technology companies because the Securities and Exchange Commission and the Justice Department have been pursuing cases against more than 100 companies over allegations of stock options backdating. The mushrooming scandal has caused executives to step down at a number of companies and caused financial restatements stretching back years.
Brocade's former vice president of human resources, Stephanie Jensen, is also facing a trial. Like Reyes, she was indicted on 12 counts of securities fraud in August of last year, although two counts were later dropped.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access