A stock option is the right to purchase a share of stock from a company at a fixed price, referred to as the “strike price,” on or after a specified vesting date. During trial, Reyes' position was that he relied on the Finance Department to make sure that the corporate books were accurate, and that he was not responsible for the false records. According to the district court, defense counsel should have sought immunity for the witnesses, and then proved, through their testimony, that the Finance Department did know about the scheme. As a joint press release emphasized, the FBI, SEC, and U. Attorney's Office forged a strong, cooperative relationship in pursuing civil and criminal punishment for misconduct relating to backdating Brocade stock options. Reyes goes further on appeal and argues that the misconduct was so flagrant that the indictment should be dismissed. Chapman, 524 F.3d 1073, 1085-87 (9th Cir.2008) (noting that dismissal of the indictment may be warranted where the prosecutor's actions rise to the level of flagrant prosecutorial misconduct, a defendant suffers substantial prejudice, and no lesser remedial action is available for the misconduct).
In a rising market, stock options generally help companies recruit employees desiring to share in the company's growth and help persuade employees to stay with the company so that their increasingly valuable options may vest and be exercised. § 240.10b-5; falsifying corporate books and records in violation of 15 U. Reyes' counsel, in closing argument, therefore told the jury that the Finance Department knew about the backdating, thus supporting the defense position. It was not, however, the defense's burden to prove Reyes was innocent. Although we do not agree with the district court that the prosecutor may have been innocent of deliberate false statements, we recognize there were aggressive tactics on both sides. The Jensen Appeal Jensen's appeal first challenges a jury instruction given in her case. Jensen's instructional challenge relates to the statutory term “willfully.” The substantive provision of the Securities and Exchange Act of 1934 (“Act”) at issue in this case requires issuers of registered securities to “make and keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the issuer.” 15 U.
Reyes became the first executive to go on trial over stock options backdating when his case went before a federal jury in San Francisco in June 2007.
He was convicted in August of 10 counts of securities fraud.
Despite the significant differences between our sentence lengths, I had a great deal of empathy for Greg because as I listened to him, I became convinced that his imprisonment represented a severe injustice.
From my perspective, our criminal justice system has lost perspective when those within it work to incarcerate citizens for decisions they make during the course of business, especially when those decisions lacked any criminal intent and any effort at self enrichment.
On appeal, that decision was overturned on the grounds the prosecution "made a false assertion of material fact to the jury during closing arguments," wrote .
The government has been trying to win a number of backdating options cases, and it appears this victory could land Reyes in jail, according to news reports.
Because of the competitive demand for qualified information technology personnel in the Silicon Valley, the company began the practice of offering new personnel and valued employees compensation in the nature of stock options. Those employees, who were themselves subject to possible criminal prosecution and had been targets of SEC civil suits, did not testify. § 240.13b2-1; and (2) conspiracy to falsify books and records in violation of 18 U. The district court's order on Jensen's sentence is published at United States v. In the district court's view, defense counsel was almost as culpable as the government because defense counsel asserted what the Finance Department knew about the backdating without calling Finance Department executives as witnesses. The SEC's complaint against Canova clearly alleges that Canova did know that backdating was occurring. Both Reyes and the government agree in their briefs that the error is not harmless if we conclude it is more likely than not that the misconduct materially affected the fairness of the trial. We do not lightly tolerate a prosecutor asserting as a fact to the jury something known to be untrue or, at the very least, that the prosecution had very strong reason to doubt. There is no reason to tolerate such misconduct here. This provision was an amendment to the Act enacted by the Foreign Corrupt Practices Act of 1977.
His case has been seen as an important test of how seriously infractions of options-related securities laws will be punished.
Prosecutors had recommended a sentence of 30 to 33 months in prison, a fine of more than million and nearly million in restitution to repay Brocade for its losses and legal fees connected to the case.
In that capacity, he did his best to create value by turning a high-technology start-up into a world-class corporation that would create enormous value for shareholders, customers, and employees. It was one of the hottest technology companies during the euphoric times that preceded the turn of the century.
With its fiber-optic networking products, Brocade unlocked storage capacity for its customers, enabling them to both make and save money.
I was extremely disappointed to read that the Ninth Circuit Court of Appeals affirmed the conviction of my friend, Greg Reyes.