Former Brocade CEO gets prison, $15M fine for backdating stock options

A former Silicon Valley executive was sentenced in federal court in San Francisco today to a year and nine months in prison and fined $15 million for fraud and false statements in backdating stock options.

Former Brocade Communications Systems Inc. Chief Executive Officer Gregory Reyes, 45, of Saratoga, was the first corporate official in the nation to go to trial in a stock options backdating case.

U.S. District Judge Charles Breyer said the case was “about lying” and “about the failure of the chief executive officer of a publicly traded company to honestly disclose the financial situation of his company.”

Breyer said a prison term was necessary to provide a warning and deterrence to officers of public corporations.

Defense attorneys had asked for a sentence of one year and one month to be served in a halfway house or home detention. Prosecutors had asked for at least twoand one-half years in prison, a $41 million fine and $90 million in restitution.

Breyer allowed Reyes to remain free while he appeals his conviction and sentence.

Reyes headed San Jose-based Brocade from 1998 to 2005. He was convicted in Breyer's court in August of 10 counts of securities fraud, conspiracy to commit fraud and making false statements in company records and to accountants.

Bay City News

businessBusiness & Real EstateLocal

Just Posted

On Sunday, California bore the brunt of what meteorologists referred to as a bomb cyclone and an atmospheric river, a convergence of storms that brought more than half a foot of rain to parts of the Bay Area, along with high winds, concerns about flash floods and the potential for heavy snow in the Sierra Nevada. Much of the Bay Area was under a flash flood watch on Sunday, with the National Weather Service warning of the potential for mudslides across the region. (NOAA via The New York Times)
Bomb cyclone, atmospheric river combine to pummel California with rain and wind

What you need to know about this historic weather event

National Weather Service flood watch in the San Francisco Bay Area for Sunday, Oct. 24, 2021. (National Weather Service via Bay City News)
Storm updates: Sunday was wettest October day in San Francisco history

Torrential rainfall causes flooding, triggers evacuations in burn areas

A Kaiser Permanente building in Redwood City (Shutterstock).
City employees face months-long wait time for mental health care

‘We are in the midst of a mental health crisis’

Plan Bay Area 2050 is an expansive plan guiding the region’s growth and development over the next three decades. The regional plan addresses progressive policy priorities like a universal basic income and a region-wide rent cap, alongside massive new spending on affordable housing and transportation infrastructure. (Shutterstock)
$1.4 trillion ‘blueprint’ would address Bay Area’s housing, transit woes

Analyzing the big ticket proposals in ‘Plan Bay Area 2050’

Smokestacks (Shutterstock).
Inside Cal State’s movement to divest from fossil fuels

By Stephanie Zappello CalMatters Ethan Quaranta seeks out nature when he needs… Continue reading

Most Read