Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Thursday, October 13, 2011

SEC & Former Brocade CEO Settle Backdating Charges

The SEC announced that on August 18, 2011, the United States District Court for the Northern District of California entered Final Judgment as to Gregory L. Reyes, based on his Consent submitted in order to settle the Commission’s action against him. The Commission’s complaint alleged that Reyes, the former CEO of Brocade Communications Systems, Inc., a San Jose computer networking company, engaged in a years-long fraudulent stock options backdating scheme.

The Final Judgment against Reyes, which he agreed to without admitting or denying the allegations against him, provides that he is enjoined from violating federal securities laws; orders him to pay disgorgement in the amount of $150,000, plus prejudgment interest thereon in the amount of $145,219.74; orders him to pay a civil penalty in the amount of $550,000; and prohibits him, for ten years, from acting as an officer or director of a public company.

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