Brocade backdating

Posted by / 04-Oct-2017 14:02

Brocade backdating

It was the start of a lifelong career devoted to HR, Little added, arguing that Jensen only got roped into the complexities of stock options and finance-related matters after she joined Brocade in 1999. “The government will make you believe that [Stephanie Jensen] sat around and falsified documents all day, but that’s actually not true. And she had learned the process from [Michael] Byrd, the [former] chief financial officer.” It was people in Brocade’s “finance department who took care of the actual mechanics,” Little argued.Jensen’s is the second such trial to take place in the matter of stock option backdating—the now-scorned practice of retroactively dating a stock option grant to immediately enhance its intrinsic value to the bearer—which was once common practice at hundreds of publicly traded companies.Brocade meanwhile will shell out million under the same terms.In options backdating, company officials offer a grant recipient the right to buy shares priced to an earlier date when the stock price was lower.

The Mercury case sets a major precedent because it is the first time the SEC has used Section 304 of the Sarbanes-Oxley financial accounting act, which allows the commission to seek the repayment of bonuses and stock sale profits received by CEOs and CFOs where financial results are later restated.However, the SEC and a California district court charged former Brocade CEO Gregory Reyes and Stephanie Jensen, former vice president of human resources, with federal securities fraud last July.The Department of Justice levied additional charges against Reyes and Jensen in August.But in August, prosecutors won a surprisingly sweeping victory in their inaugural backdating case against Jensen’s former boss, ex-CEO Gregory L. A 12-member jury convicted Reyes of 10 felonies for his role in the illegal granting of employee stock options at Brocade.The government is arguing that Jensen, in her role as chief of human resources, actively managed the option granting process that Brocade used mainly as a recruiting tool.

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