Read The Recorder‘s roundup of the stock-option backdating scandal. There won’t be a test later … but there might be a subpoena.
“Prabhat was the guy who was the sort of yin to Mr. Larson’s yang,” Jonas said, adding that Goyal was the person saying “‘let’s make sure that this is done on the straight and narrow.’”
Davis, on the other hand, acknowledged that his conduct at McAfee followed neither the straight nor the narrow when he pleaded guilty in 2003 to securities fraud and agreed to cooperate against his old boss.
It’s unlikely that prosecutors back then foresaw the side benefit of Davis’ cooperation: He’s now a key witness in the options backdating case against Roberts. In fact, the Roberts indictment claims Davis was the scapegoat in Roberts’ scheme to cover up his own options misbehavior.
The February indictment said the former GC asked Davis to alter the date on an options grant in 2000. Prosecutors contend that, after McAfee’s accounting problems led Goyal and other top executives to leave in 2000, McAfee started an “ethics first committee” � and put Roberts in charge � to investigate internal whistle-blower complaints.
When someone told the committee that Davis was involved in accounting improprieties, including options problems, the indictment says, Roberts investigated � but in doing so, he failed to mention that he had directed Davis to backdate his own grant.
“As a result of the investigation, Roberts recommended, and Network Associates’ management agreed, to remove the then-controller from his position in the finance department,” the Roberts indictment says.
A lawyer for Roberts, Cooley Godward Kronish partner Neal Stephens, said in a Thursday voicemail that he couldn’t comment because he was in meetings all afternoon.
And Thomas Nolan, the Nolan, Armstrong & Barton partner representing Davis, didn’t return a call by press time.
But lawyers in the Roberts case will be listening closely if Davis takes the stand.
And that remains an “if.” While Stretch did mention Davis in his opening statement, Jonas signaled that he’d push hard to question witness’ credibility by saying that government witnesses had been interviewed multiple times.
“They’re going to bring you witnesses who are felons,” he told the jury.