Topic: D&O Liability

Federal Prosecutors Hint at Appeal of KPMG Defense Costs Decision

The United States government appears to have conceded that a complete dismissal of indictments against 12 former KPMG partners is the only appropriate remedy in light of an earlier ruling that federal prosecutors violated the defendants’ constitutional rights.  The action, U.S. v. Stein, No. 05 Crim. 0888 (S.D.N.Y.), stems from allegations that KPMG employees participated in a scheme to defraud the IRS by creating fraudulent tax shelters for wealthy clients. 

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The Brocade Trial: The First Two Weeks

After the first two weeks of the Brocade trial that may last up to two months, the sole development of note remains the potentially damaging testimony of a former human resources employee that  Brocade exec Greg Reyes told her that “it’s not illegal if you don’t get caught.” 

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The Brocade Criminal Trial: Former Employee Testimony Damaging to Reyes

The first criminal trial  arising out of the stock options backdating scandals, involving Brocade Communications Systems, Inc.’s former CEO, Gregory Reyes, began on Monday, June 18, 2007 in the United States District Court for the Northern District of California.  Reyes is accused of intentionally falsifying board meeting minutes and disseminating false financial statements in order to conceal the backdating of stock options. 

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