Brocade communications options backdating
It was forced to restate earnings by recognizing a stock-based expense increase of 3 million between 19, after allegedly manipulating its stock options grants for the benefit of its senior executives.
It allegedly failed to inform investors, or account for the options expense(s) properly.
About 100 companies have announced restatements totaling more than billion to account for past stock-option grants. Securities and Exchange Commission also is pressing cases over backdating.Options backdating may still occur under the new reporting regulations, but Sarbanes-Oxley compliant backdating is far less likely to be used for dishonest reasons due to the short time frame that is allowed for reporting.As a result, numerous companies are conducting internal investigations to determine if, when, and how backdating occurred, and are filing amended earnings statements and tax forms to show the issuance of “in the money” options in place of the “at the money” options that were previously reported.Most of the executives did not testify at trial, and one of them recanted her testimony in Reyes’ favor after the trial, but U. District Judge Charles Breyer rejected Reyes’ argument.“The proceedings that were had here were not fair, and the convictions that resulted cannot stand,” Reyes’ brief states.