Feeds

Former Juniper attorney faces SEC's wrath

Juniper out of the bush but Berry gets the squeeze

Internet Security Threat Report 2014

Juniper Networks has settled with the US Securities and Exchange Commission (SEC) over allegations of improper stock option backdating. But while the networking equipment maker swims out of hot water, its former legal counsel is getting a double dip in the stew pot.

The SEC filed fraud charges yesterday against Bay Area attorney Lisa Berry for her role in the backdating options while at Juniper and at KLA-Tencor Corporation.

The Commission's complaint against Berry, filed in federal district court in San Jose, accuses her serial backdating. While at KLA, she allegedly identified dates with historically low stock prices to facilitate the backdating of option grants by the companies option committee. Berry moved to Juniper shortly before its 1999 IPO. At Juniper, the SEC claims, she established a similar backdating process, creating minutes of fictitious stock option committee meetings to document false grant dates - at times using the names of other committee members with a signature stamp.

As a result of the allegedly misleading disclosures, KLA overstated its net income in fiscal years 1998 through 1999 by as much as 47 per cent. Juniper overstated its 2003 net income by nearly 22 per cent. This year, Juniper restated its financial earnings, showing nearly $900m in previously unreported compensation expenses.

"The Commission's action ... confirms that attorneys are no less bound by the securities laws than other public company executives," said Linda Chatman Thomsen, the SEC's director of enforcement. "At both KLA and Juniper, Ms. Berry was in a unique position to insure that the companies accurately disclosed their stock option expenses; instead, she facilitated their fraud on investors."

The SEC announced yesterday that — of course without admitting or denying the allegations — Juniper has consented to a permanent injunction against violations of the anti-fraud provisions of the federal securities laws. Juniper said it has done so without being fined, and the investigation is closed.

The charges against the company and Berry stem from an industry-wide probe of backdating investigation by the SEC. Last week, the commission fingered former Brocade CFO Michael Byrd with eight counts of fraud related to backdating stock options. Earlier this month, Gregory Reyes, Brocade's former CEO, was found guilty of backdating securities fraud. The company's former HR veep, Stephanie Jensen, also faces charges. ®

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
MI6 oversight report on Lee Rigby murder: US web giants offer 'safe haven for TERRORISM'
PM urged to 'prioritise issue' after Facebook hindsight find
Assange™ slumps back on Ecuador's sofa after detention appeal binned
Swedish court rules there's 'great risk' WikiLeaker will dodge prosecution
NSA mass spying reform KILLED by US Senators
Democrats needed just TWO more votes to keep alive bill reining in some surveillance
'Internet Freedom Panel' to keep web overlord ICANN out of Russian hands – new proposal
Come back with our internet! cries Republican drawing up bill
prev story

Whitepapers

Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Driving business with continuous operational intelligence
Introducing an innovative approach offered by ExtraHop for producing continuous operational intelligence.
10 threats to successful enterprise endpoint backup
10 threats to a successful backup including issues with BYOD, slow backups and ineffective security.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?