August 17, 2007
SEC Files Fraud Charges Against Former Brocade CFO
The SEC filed fraud charges against Michael J. Byrd, a former Chief Financial Officer and Chief Operating Officer of Brocade Communications Systems, Inc., alleging that he disregarded indications that other senior corporate executives were improperly backdating stock option grants at the company. The Commission alleges that Byrd learned of instances in which Brocade's then-CEO and others were backdating options for certain individuals, yet failed to ensure that the company properly accounted for the option expenses and disclosed them to investors. The Commission's complaint further alleges that Byrd himself received a backdated option grant after becoming the company's Chief Operating Officer in 2001, and filed a disclosure statement with the Commission falsely stating that the options had been granted on an earlier date.
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