Second ex-Brocade exec hit with guilty verdict
Print storyThe weed of backdating bears bitter fruit
Posted in Financial News, 6th December 2007 19:20 GMT
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A second former executive at Brocade was convicted Wednesday for participating in the company's stock option backdating skulduggery.
After one day of deliberation, a San Francisco federal jury found Stephanie Jensen guilty of both charges she faced: conspiracy and falsifying corporate records.
Jensen, the former vice president of human resources at Brocade, faces up to 20 years in prison. She will be sentenced on March 12.
Brocade's former chief executive, Gregory Reyes, also awaits sentencing after a jury convicted him last August of 10 counts related to the backdating scheme.
Prosecutors claim Jensen conspired with Reyes to falsify executive options records so they appeared to have been awarded when Brocade's stock was at quarterly lows. By failing to disclose the practice with investors and regulators, US authorities say the two illegally inflated Brocade's earnings.
In May, Brocade paid $7m to settle SEC charges of falsifying reports of income through backdating and falsifying compensation expenses between 1999 and 2004. The company neither admitted nor denied any wrongdoing.
Reyes and Jensen are the first Silicon Valley executives to face trial over the options backdating issues. The book-cooking hunt has become a favorite pursuit of the SEC.
"The integrity of our stock markets depends on the accuracy of the books and records of a public company," said US Attorney Scott Schools in a statement. "Accordingly, prosecuting securities fraud and manipulation will remain one of this office's top priorities." ®
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