November 21, 2007
Letters of Support for Reyes
Lawyers for former Brocade CEO Gregory Reyes filed a number of letters requesting that U.S. District Judge Charles Breyer show him leniency when Reyes is sentenced in December on the ten charges related to options backdating at the company. It is commonplace in white collar crime cases -- particularly for convicted CEOs -- for a deluge of letters in support of the defendant to come to the sentencing judge. A sample of the letters (available below) includes a number written by former Brocade employees attesting to Reyes' good character. In addition, there are letters from the CEO and chairman of VeriSign, which recently announced that the SEC closed its investigation of the company for options backdating, the former U.S. CEO of PricewaterhouseCoopers who served on Brocade's audit committee, and a senior partner at McKinsey.
Whether these types of letters have any appreciable effect on the sentencing is an open question. The Federal Sentencing Guidelines is usually the main driver of the sentence, but if Judge Breyer is willing to depart from the recommended sentence then they could provide the support necessary. The sentencing will take place after the trial of a second Brocade officer, the former manager of its HR department, scheduled to begin after Thanksgiving. (ph)
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Why was this case allowed to proceed when other options cases were dropped due to lack of materiality? Its really sickening to have a legal system that lets Steve Jobs do something that others can't do, which is what this smells like. Reyes was the least guilty of all the backdating executives since he did not materially benefit. The others such as Verisign mentioned and certainly Apple, did. Furthermore the prosecution claimed the finance people at the company were in the dark, and didn't call any finance witnesses until a week after the trial when the CFO was charged as a recipient of large backdated option grants. This case represents the worst of the US justice system.
Posted by: Smort4 | Nov 21, 2007 9:08:18 AM