Former Brocade CEO charged with fraud in stock options probe
7/20/2006SAN FRANCISCO The former chief executive of Brocade Communications Systems Inc. was charged today with fraud, the first indictment in a stock options probe that involves more than 55 U.S. companies.
Gregory L. Reyes, 43, became the first chief executive to be charged criminally for improper practices related to inaccurate dating of stock options grants.
Reyes resigned in 2005 shortly after the San Jose-based maker of data storage devices said an internal audit had uncovered improper accounting of stock options.
Stephanie Jensen, Brocade s former vice president of human resources, was also charged, according to the U.S. Attorney s office in San Francisco.
Both individuals also face civil charges by the Securities and Exchange Commission. The allegations concern a practice known as backdating, in which options are retroactively issued to coincide with low points in a company s share price.
An attorney for Reyes said in a release that his client was innocent.
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