Mcafee backdating trial
The lack of a personal financial motive distinguishes the case from more-notorious securities-fraud cases such as Enron Corp ECSPQ. “If I were a prosecutor, I’d be reluctant to bring a case against a guy who didn’t make any money on the deal,” said Joseph Bartlett, an attorney at Fish & Richardson in New York and a former acting professor at Stanford Law School.“I don’t think it’s in the same category as the Enron or Worldcom game,” where executives reaped large personal gains. Securities and Exchange Commission is also investigating backdating, and about 100 companies have announced restatements totaling more than billion to account for past options grants.The company appointed former Borland Software chief Dale Fuller as its interim CEO and president.
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Weiss had been with Mc Afee since October 2002 and was appointed president of the company in March 2006.
Samenuk, who served as the companys chairman and CEO for just over six years before being forced into retirement by the backdating scandal, had the price of 300,000 shares of common stock awarded in May 2004 increased to .75 from .57 to more accurately reflect the price of the companys stock at the time the options were granted.
“It’s a pretty strong case for the defense, but if there’s a conviction, the Justice Department will be emboldened to bring these coin-toss cases” where the outcome is uncertain, he said. Experts said it may be difficult to convict Reyes because both sides agree he did not profit personally from the backdating, in which option grants were retroactively priced on days when Brocade’s stock was low, maximizing gains for employees.
San Jose, California-based Brocade is the world’s largest maker of data-storage network switches. While prosecutors are not required to prove that Reyes profited personally, jurors may be more lenient if he did not do so.