Aug articles on stock option backdating Video chat with pregnant
Although the decision on whether to put the client on the stand is a tough one in almost all criminal cases, an educated, polished and credible defendant might be able to turn the jury on the potentially dispositive issue of intent in a backdating case. Implications of the Reyes Verdict on Civil Backdating Cases Reyes' conviction is likely to spill over into civil backdating litigation in that the plaintiffs' bar will be more inclined to file new lawsuits and there will be higher likelihood to settle pending civil cases.Finally, the Reyes case highlights an issue addressed in U. District Judge Lewis Kaplan's recent decision in a suit against former officers of accounting firm KPMG, United States v. Both of these effects derive from the "mass psychology" mentioned above, in that defendants now will perceive backdating cases as more risky (and plaintiffs, as less risky), because a jury of 12 citizens now has imposed criminal fraud liability in a backdating case.Just as market makers lead markets, convictions often beget plea bargains.But while the Reyes verdict may motivate the government to talk tough in plea negotiations, it knows as well as the defense bar that jury trials often are a roll of the dice, and the government is unlikely to risk a highly publicized acquittal that turns the Reyes decision on its head. Although reasonable minds may differ on how stunning the verdict was, its fallout will certainly extend beyond the confines of the case itself. 7, in what media reports variously described as a surprising," "shocking," "astounding" and "stunning" verdict, a federal jury in San Francisco convicted former Brocade Communications CEO Gregory Reyes on all 10 criminal counts relating to his alleged "backdating" of stock-option grants to Brocade employees.
First, the most prevalent defenses in white-collar prosecutions are: In Reyes' case, the defense focused almost exclusively on the last defense, which raises the issue of criminal intent.
Backdrop of the Case The backdating "scandal" exploded on the scene in the spring of 2006, when the Wall Street Journal ran a series of articles about the unusual correlation between the dates of stock-option grants and share values on those dates.
Specifically, the Journal found that share values decreased immediately before the granting of stock options, usually to corporate executives, and increased immediately after the grants.
Going forward, defense counsel must assess whether other factual or legal defenses may be more persuasive to a jury, such as a client's professed lack of knowledge that backdating was even occurring, as well as the type and strength of the government's evidence of intent. As those of us who conduct internal investigations know, one must always caution company employees that outside counsel represents the company, not the individual, and the company can waive any privilege that otherwise might attach to an employee's interview.
Second, counsel must recognize the distinction between judge and jury with respect to questions of fact. When the company decides to waive that privilege and cooperate with the government, the employee's statements, however incriminatory, may be turned over to the government and used against the employee.