Read The Recorder‘s roundup of the stock-option backdating scandal. There won’t be a test later … but there might be a subpoena.
Though some observers said the prosecutors did a poor job of directly tying CEO Reyes to the misconduct of his underlings, the jury convicted him on all 10 counts against him after six days of deliberation.
Throughout the trial, the prosecution never tried to prove that the former Brocade CEO lined his own pockets. But along with all the losses tallied in the brief, the prosecution said Reyes reaped more than $5 million from backdating his own options.
Christopher Steskal, the former assistant U.S. attorney who originally worked on the case, said he could not comment on the Reyes trial, but said “courts typically consider what’s called relevant conduct when sentencing, even if it wasn’t brought up at the trial.”
But Henning said the defense can be expected to vigorously fight the use of the unproven “self-dealing” accusation.
“There will be a question as to whether you can include this kind of uncharged conduct,” Henning said. “The defense may argue that the government is trying to get in the back door what it couldn’t get through the front door.”
The defense will file its own brief Oct. 5 and the government will have to reply by Oct. 19. Friday’s filing, Henning said, “is a preliminary estimate � they’re throwing out some trial balloons and seeing what works.”
Reyes’ lawyer, Richard Marmaro, declined to comment on the brief Friday.
“We will be filing our brief in two weeks,” he said.
Sentencing is set for Nov. 21.
