Federal prosecutors maintained their perfect backdating batting average Wednesday by securing the conviction of former Brocade human relations executive Stephanie Jensen.
But in the context of the government's overall stock option game plan, this latest verdict is probably more of a single than a home run.
The jury convicted Jensen of two counts: falsifying company books and conspiracy. That's a much narrower set of offenses than prosecutors scored against former Brocade CEO Gregory Reyes in August; he was convicted of 10 felony counts. Reyes is scheduled to be sentenced Dec. 19.
In the weeks leading up to Jensen's trial, prosecutors dropped securities fraud counts and homed in on the simpler books and records charge. Assistant U.S. Attorneys Timothy Crudo and Adam Reeves prosecuted the case.
"It's not simply that she happened to be part of the falsification," Crudo said after the verdict. "I think the evidence was clear that she was an integral part of the process."
Jensen's defense team, led by Keker & Van Nest partner Jan Little, declined comment as they sullenly marched past reporters outside of Judge Charles Breyer's courtroom.
Deliberations lasted little more than one day, following a trial that took only 5 1/2 days. Jurors filed into the box at 2:50 p.m., with none looking at Jensen on the way in. Jensen sat stone faced through the verdict, and only after the proceeding did she weep in Little's arms.
One downcast-looking juror, Iris Hammer, turned to reporters as she walked to the elevator. "I had to follow the law," the gray-haired woman said simply.
After the jury left the courtroom, Breyer told the parties that for sentencing, he wanted both sides to extensively brief the issue of whether there was evidence of knowledge. According to the prosecutors, Breyer was referring to a law that permits an affirmative defense at sentencing: If the defendant can prove she had no knowledge about the rule or regulation she violated, she can't be imprisoned.
Breyer has already denied a defense motion to acquit. In it, Little had argued that the government didn't come close to showing that Jensen had the knowledge and intent necessary to commit the crimes.
"It failed to prove that Ms. Jensen knew 'GAAP' was anything other than a clothing store, let alone that she had any understanding of what GAAP required for accounting for stock options," Little wrote. "The government's evidence has only shown that, like the HR witnesses called on its behalf, Ms. Jensen did not appreciate the ramifications of doing what her bosses told her to do."
Breyer asked the defense to file its motion for a new trial within the next 10 days, and scheduled Jensen's sentencing for March 12.
