Feeds

Brocade securities probe hits former CFO

Looking the other way? That's a paddlin'

The essential guide to IT transformation

The US Securities and Exchange Commission (SEC) has smacked former Brocade CFO Michael Byrd with eight counts of fraud related to backdating stock options.

The commission alleges that Byrd ignored red flags indicating the company's corporate executives were tooling around with the options. Charges filed today in federal district court in San Francisco stipulate that he was aware of the misconduct, but never tried to account for the expenses or disclose them to investors.

SEC Director of Enforcement Linda Thomsen, said the long arm of the law doesn't stop at those who cooked the books. "This case confirms the Commission's commitment to pursuing not just those who perpetrate financial fraud, but the corporate gatekeepers who allow it to happen on their watch."

The complaint cites instances where Brocade allegedly granted options to executives on dates before they had been hired by the company. According to the SEC, Byrd was personally involved in interviewing some of the executives, and was therefore aware the paperwork required a Dewey Decimal class of 813 (that's to say, American fiction).

While backdating itself is not illegal, the improper disclosure to stock holders and the SEC and falsifying documents related to the act certainly is.

"Mr. Byrd was in a position to identify accounting irregularities and provide Brocade's shareholders with honest, accurate information," said Marc Fagel, the SEC's San Francisco regional director. "Instead, we believe he turned a blind eye to misconduct by senior executives and signed off on fraudulent financial statements."

According to SEC, Byrd received a backdated option grand after becoming chief operating officer in 2001.

Earlier this month, Gregory Reyes, Brocade's former CEO was found guilty of the backdating securities fraud. The company's former human resources veep Stephanie Jensen also faces charges of fraud and other security law violations.

In May this year, Brocade ponied up $7m to settle SEC charges of falsifying reports of income and mis-reporting compensation expenses between 1999 and 2004. The company hasn't admitted or denied any wrongdoing. ®

Next gen security for virtualised datacentres

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
Banking apps: Handy, can grab all your money... and RIDDLED with coding flaws
Yep, that one place you'd hoped you wouldn't find 'em
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
Primetime precrime? Minority Report TV series 'being developed'
I have to know. I have to find out what happened to my life
prev story

Whitepapers

A new approach to endpoint data protection
What is the best way to ensure comprehensive visibility, management, and control of information on both company-owned and employee-owned devices?
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.