Stock Options Backdating Conviction: Reversed!
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It’s a good morning for Gregory Reyes, who was the chief executive officer of San Jose, California-based Brocade Communication Systems, Inc., a publically traded company engaged in the high-tech business of developing and selling network equipment and providing networking solutions.
Yesterday, the U.S. Court of Appeals for the Ninth Circuit reversed his conviction in a stock options backdating case – the first such case to go before a jury – because of prosecutorial misconduct in making a false assertion of material fact to the jury in closing argument.
Reyes is not quite off the hook; the circuit court found that the prosecutor’s conduct was not so egregious as to require dismissal of the prosecution, and it ordered a new trial. But better a new trial than a jail cell.
Oh, while it was at it, the Ninth Circuit affirmed the conviction of Stephanie Jensen, who was Brocade’s vice president of human resources, but ordered her resentenced. The circuit court found that the trial court had improperly included an obstruction of justice enhancement in her sentence.
Attorneys involved in this case include Amber Rosen, for the government, and Seth P. Waxman and Steven A. Hirsch for the defendants.
The decision, U.S. v. Reyes, is available at http://www.ca9.uscourts.gov/datastore/opinions/2009/08/18/08-10047.pdf.
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