Backdating may have helped companies like Brocade attract employees, but it also cost investors millions of dollars, the government says.
Reyes' conviction has no binding to other backdating cases pending, attorney with the DOJ, Scott Schools, said.
It was the start of a lifelong career devoted to HR, Little added, arguing that Jensen only got roped into the complexities of stock options and finance-related matters after she joined Brocade in 1999. “The government will make you believe that [Stephanie Jensen] sat around and falsified documents all day, but that’s actually not true. And she had learned the process from [Michael] Byrd, the [former] chief financial officer.” It was people in Brocade’s “finance department who took care of the actual mechanics,” Little argued.
Jensen’s is the second such trial to take place in the matter of stock option backdating—the now-scorned practice of retroactively dating a stock option grant to immediately enhance its intrinsic value to the bearer—which was once common practice at hundreds of publicly traded companies.
It’s also the second trial with a Brocade employee as the defendant.
The conviction is the Department of Justice's (DOJ's) first relating backdating."He was involved in a scheme to backdate stocks and not to record the costs," assistant attorney with the US Department of Justice, Tim Crudo, said in a press conference, held after the verdict. This practice of back-dating stock option grants has come under intense scrutiny over the past few years.
Many Silicon Valley companies including Apple Computer, Mc Afee, Sycamore Networks and Rambus, have been under investigation for their stock option practices around the late 1990s, a time when technology companies competed fiercely for top executive talent.