Monday, June 18, 2007

Options Backdating: First-ever Criminal Trial


The first criminal trial in the nationwide stock-option backdating scandals starts today in federal court in San Francisco, and attorneys say the case will define whether backdating-related practices are serious crimes — or just sloppy bookkeeping.
With more than 200 investigations and corporate internal probes into backdating, many are watching the securities-fraud trial of former Brocade Communications
(BRCD) CEO Gregory Reyes for clues on how prosecutors will handle the cases.
"This trial is going to establish where the line is between shoddy accounting practices and criminal conduct," says Peter Henning, a Wayne State University law professor and co-editor of the White-Collar Crime Prof Blog "What type of conduct is securities fraud in the context of backdating? That line isn't clear at the moment."

Read the backstory on the civil case that Brocade settled here:

No comments: