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Former Brocade CEO's Backdating Conviction Is Reversed
The Recorder
Ex-Brocade CEO Gregory Reyes leaves the federal courthouse in San Francisco during his trial for backdating stock options.
Image: Shelley Eades/The Recorder
The 9th U.S. Circuit Court of Appeals has thrown out Gregory Reyes' conviction for stock option backdating while he was CEO at Brocade Communications Inc. The court ruled that Assistant U.S. Attorney Adam Reeves committed prosecutorial misconduct by saying during closing argument that the entire Brocade finance department was ignorant of the fraud.
"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 of California U.S. attorney's office, as Reyes and Jensen were the only executives convicted at trial for stock option backdating .
Legal Pad will have a fuller story later in the day.
