Updates to our Terms of Use

We are updating our Terms of Use. Please carefully review the updated Terms before proceeding to our website.

Saturday, February 24, 2024
Courthouse News Service
Saturday, February 24, 2024 | Back issues
Courthouse News Service Courthouse News Service

McAfee CFO ‘Vindicated’ by Overturned Conviction

(CN) - The 9th Circuit overturned the conviction of former McAfee chief financial officer Prabhat Goyal on charges of securities fraud and lying to auditors.

"The government shouldn't have brought charges unless it had clear evidence of wrongdoing, and the trial judge should have dismissed the case when the prosecution rested and it was clear the evidence could not support a conviction," Chief Judge Alex Kozinski wrote in a separate, concurring opion.

A jury convicted Goyal in 2007 of securities fraud and lying to auditors about what prosecutors claimed were questionable accounting practices used by the security software company between 1998 and 2008.

The government alleged that Network Associates, which later changed its name to McAfee, had violated generally accepted accounting principles (GAAP) under Goyal's watch, by recognizing revenue from certain software sales earlier than it should have.

Goyal appealed after the district court denied his motions for judgment of acquittal and for a new trial.

The federal appeals panel in San Francisco reversed, finding the evidence against the former CFO lacking.

"The prosecution offered no evidence adequate to prove that any GAAP violations materially affected the revenue that [Network Associates] reported," Judge Richard Clifton wrote for the panel. "Even viewing the evidence in the light most favorable to the prosecution, no reasonable juror could have found Goyal guilty beyond a reasonable doubt of any of the charges against him."

Kozinski wrote that the government should never have brought the charges against Goyal, who was only saved from serving time for a crime he did not commit by his "exceptionally fine advocacy."

"This is not the way criminal law is supposed to work," Kozinski wrote. "Civil law often covers conduct that falls in a gray area of arguable legality. But criminal law should clearly separate conduct that is criminal from conduct that is legal."

Kozinski continued: "Although we now vindicate Mr. Goyal, much damage has been done. One can only hope that he and his family will recover from the ordeal. And, perhaps, that the government will be more cautious in the future."

Categories / Uncategorized

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.