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Federal prosecutors just got their second punch in the gut over the Greg Reyes backdating case: The 9th U.S. Circuit Court of Appeals has explicitly refused to back away from a finding that the government committed deliberate misconduct during trial.

Reyes’ securities fraud convictions had been the Northern District of California’s highest-profile success in the war against stock-option backdating, because Reyes had been CEO of Silicon Valley darling Brocade. But over the summer an appellate panel threw out those verdicts, finding that Assistant U.S. Attorneys Tim Crudo and Adam Reeves misled the jury by stating that Brocade’s finance department didn’t know anything about backdating at the company. In fact, it did.

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