Friday, July 21, 2006

2 Are Charged in Criminal Case on Stock Options

Moving to crack down on what Securities and Exchange Commission chairman Christopher Cox has called a “poisonous” practice, federal prosecutors have handed down the first set of charges in their widening investigations into stock options backdating, charging two former Brocade Communications executives with one count each of securities fraud. A separate civil complaint filed by the S.E.C. names the two and adds a third officer.

George L. Reyes, Brocade’s chief executive until January 2005, and Stephanie Jensen, vice president for human resources until 2004, were accused of doctoring documents, including job offer letters, minutes of meetings, to make it seem as though options ladled out to employees were given earlier and out of the money. The S.E.C.’s complaint also includes Antonio Canova, Brocade’s chief financial officer until December 2005.

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