Earlier this week former Brocade CEO Gregory Reyes was found guilty of all charges in connection with stock option backdating and failing to report such backdating to auditors, regulators, and investors. This is the first conviction of an executive in the government’s option backdating investigation, and it occurred despite the fact Reyes never cashed in on his backdated options.
Reyes faces years of prison time and significant fines. More convictions are expected in a post-Enron era where juries are willing to convict not only instigators of backdating plans, but those who go along with illegal practices as well.
