The first criminal trial of stock options backdating conduct may end with the court finding that government prosecutors failed to present sufficient evidence of intent to support a conviction.  At the conclusion of the prosecution’s case, the defendant, former Brocade CEO Greg Reyes, moved to dismiss, and last Friday, July 6, 2007, oral argument was heard.  Although mid-trial motions to dismiss are rarely granted, Judge Breyer appears be seriously considering Reyes’ motion.  Indeed, during oral argument, Judge Breyer challenged the prosecutors to demonstrate that they had offered sufficient evidence to establish that Reyes knew that Brocade’s stock option accounting practices were illegal, and ordered the government to submit briefs on this issue.  Notably, Judge Breyer appears to be unimpressed with key evidence offered by the government, including the testimony of a former human resources employee that Reyes had said “its not illegal unless you get caught,” in the context of Brocade’s stock option practices.  Judge Breyer asserted that that this testimony was “pretty untethered.”  In addition, Judge Breyer questioned whether there was any evidence that Reyes had actually read an email that addressed legal ways of accounting for stock options.  Judge Breyer is expected to rule on this motion shortly, with his opinion potentially setting the bar for showings of intent in future criminal trials concerning alleged stock options backdating.