1½ Years, $15M Fine for Brocade’s Ex-CEO

SAN FRANCISCO (CN) – The former CEO of Brocade Communications was sentenced on Thursday to 18 months in prison and fined $15 million for backdating stock options. A federal jury convicted Gregory Reyes of securities fraud, lying to accountants and keeping false books and records. Reyes was ordered to surrender on Sept. 10.

     Reyes, 47, of Saratoga, Calif., backdated stock options to inflate company earnings. Federal prosecutors recommended a sentence of 37 months and a fine of $33 million.
     “At trial, the government’s expert, Gerald Fujimoto of Deloitte LLP, estimated the total amount of the fraud on the investing public at approximately $949,538,000,” the U.S. Attorney’s office said in announcing the sentence.
     Reyes was convicted of four counts of securities fraud, four counts of lying to accountants and one count of keeping false books and records.

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