Gregory Reyes isn't out of legal trouble yet. Federal prosecutors have decided to retry Reyes for securities fraud related to stock option backdating, say three lawyers familiar with the matter.
A jury convicted the former Brocade CEO in 2007, but the 9th U.S. Circuit Court of Appeals threw out the verdict this year, citing deliberate misstatements on the part of prosecutors.
U.S. District Judge Charles Breyer has scheduled a status conference for Wednesday, at which point prosecutors are expected to announce the decision to try Reyes again.
Richard Marmaro of Skadden, Arps, Slate, Meagher & Flom represented Reyes at trial, but since then Reyes has also retained John Hemann of Morgan, Lewis & Bockius. More recently, Reyes hired Stephen Neal, the Cooley Godward Kronish partner who secured an acquittal for former McAfee General Counsel Kent Roberts on backdating-related counts. Defense lawyers did not respond to questions about who would take the lead during the retrial.
Before the 9th Circuit weighed in, Reyes was the government's biggest catch in its anti-backdating efforts. A separate jury also convicted Stephanie Jensen, Brocade's former HR chief, on a count of falsifying the company's books and records. Breyer gave Reyes 21 months, and Jensen four months, but stayed those sentences pending appeal.
In reversing, the appellate court found prosecutorial misconduct on the part of Assistant U.S. Attorneys Timothy Crudo and Adam Reeves. The court singled out statements Crudo, now a partner at Latham & Watkins, made during closing arguments, in which he claimed Brocade's finance department didn't know about backdating. In fact, it did.
Reeves will remain on the government's team during the upcoming retrial, said one person familiar with the case. The circuit upheld Jensen's conviction, but ordered that Breyer re-sentence her.
