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

If you find our journalism valuable and relevant, please consider joining our Examiner membership program.
Find out more at www.sfexaminer.com/join/

Just Posted

Methamphetamines (Sophia Valdes/SF Weekly)
New search launched for meth sobering center site

Pandemic put project on pause but gave health officials time to plan a better facility

Hasti Jafari Jozani quarantines at her brother's San Francisco home after obtaining several clearances to study at San Francisco State University. (Photo courtesy Siavash Jafari Jozani)
Sanctions, visas, and the pandemic: One Iranian student’s bumpy path to SF State

Changing immigration rules and travel restrictions leave some overseas students in limbo

Woody LaBounty, left, and David Gallagher started the Western Neighborhoods Project which has a Balboa Street office housing historical items and comprehensive website dedicated to the history of The City’s West side. (Kevin N. Hume/S.F. Examiner)
Outside Lands podcasts delve in to West side’s quirky past

History buffs Woody LaBounty and David Gallagher have been sharing fun stories about the Richmond and Sunset since 1998

After the pandemic hit, Twin Peaks Boulevard was closed to vehicle traffic, a situation lauded by open space advocates. (Kevin N. Hume/S.F. Examiner)
New proposal to partially reopen Twin Peaks to vehicles pleases no one

Neighbors say closure brought crime into residential streets, while advocates seek more open space

Protesters rally at the site of a proposed affordable housing project at 2550 Irving St. in the Sunset District on Saturday, Jan. 23, 2021. (Ming Vong/S.F. Examiner)
Sunset District affordable housing discussion flooded with ‘scare tactics and hysteria’

Project would provide 100 units, some of which would be designated for formerly homeless families

Most Read