Read The Recorder‘s roundup of the stock-option backdating scandal. There won’t be a test later … but there might be a subpoena.
“The government’s proof of criminal intent was thin, and Mr. Reyes presented credible, innocent reasons for his actions,” said Jan Handzlik, a partner at Howrey representing several executives in other backdating cases. “As a result, the jury’s guilty verdicts will encourage prosecutors to bring more of these cases, relying in large part on the public’s suspicion of anything to do with the timing of stock options.”
But at the press conference, neither Schools nor the assistants would address whether the conviction will lead to a rash of new options indictments.
“What the verdict means is that a single jury listened to the evidence in a single case and found a single defendant violated the law,” he said.
And Cristina Arguedas, a partner at Arguedas, Cassman & Headley in Berkeley who represents several executives in options probes, agreed. “I think it was a little bit of urban legend that whatever happens in Brocade means something to everybody else,” she said. “I don’t think it does.”
Reyes was the first executive to be criminally charged after the Wall Street Journal ran a series of stories last year exposing widespread backdating. From the start, his lawyers sparred vigorously with prosecutors and publicly questioned why Reyes was charged when other executives at companies with options problems � like Steve Jobs at Apple Inc. � weren’t. That tenor continued through the trial, when Assistant U.S. Attorney Reeves told the jury that Marmaro was unreliable because he was present when Reyes lied during Brocade’s internal investigation.
Breyer also gutted the defense’s last hope Tuesday by denying a motion to dismiss the case on the grounds that no rational juror could convict based on the evidence. In an order he signed Friday � but filed only after the verdict was rendered � he said there was sufficient evidence for a jury to make a decision.
Crudo and Reeves declined to comment after the verdict was read, as did several lawyers on Reyes’ defense team.