Companies

Former Brocade CEO convicted on backdating charges

Gregory Reyes has become the first former chief executive of a US company to be convicted in connection with stock options backdating. Reyes, former Brocade Communications Systems chief executive, was found guilty of conspiracy, securities fraud, lying to accountants, and false books and records counts.

The charges came in connection with the use of historical stock price performance data to pick low prices when backdating options, which the prosecution said enabled Brocade to improperly avoid compensation expenses that would have reduced the company’s reported net income.

US attorney Scott Schools commented: “The jury’s verdict recognised that backdating option grants with an intent to deceive as done in this case is a crime”.

September 2007