Today, former Brocade CEO Greg Reyes was sentenced to 21 months in prison and ordered to pay a $15 million fine in the first criminal trial to arise out of the stock options backdating scandal. As previously reported on InsureReinsure.com here, Reyes was convicted of ten counts of securities fraud on August 7, 2007 for failing to properly account for backdated stock options. Defense counsel has indicated that Reyes will appeal his conviction and Reyes was released on his own recognizance until an appellate court can hear the case.
The prison term and fine are both substantially less than those recommended by the prosecutors, who recommended a sentence of 30 to 33 months in prison, a fine of more than $41 million and approximately $90 million in restitution. Reyes’ attorneys requested a sentence of no more than 13 months in a halfway house or in the form of home detention.
Following Reyes’ August 7, 2007 conviction, government prosecutors obtained a second backdating related conviction, this time in a trial against Stephanie Jensen, Brocade’s former director of human resources. Jensen is scheduled to be sentenced on March 12, 2008.
