Sec stock option backdating cases dating brainy people

Those still under the scrutiny of the SEC for option backdating will have to watch and wonder in the coming days whether the prosecution standards will focus on intentional fraudulent conduct or a lesser negligence standard.

Stephanie Jensen "routinely schemed with her boss," former chief executive Gregory Reyes, to falsify board meeting minutes to hide from auditors the practice of granting backdated options to new employees, an assistant US attorney, Adam Reeves, said in opening arguments.Her trial began three months after Reyes was found guilty of conspiracy, securities fraud, and other charges, making him the first CEO convicted by a jury in a broad US crackdown on options backdating.Jensen learned Brocade's stock-option practices from Reyes and the company's finance chief, who taught her the process of choosing grant dates for stock options and preparing documents about them weeks and sometimes months later, said Jan Little, Jensen's attorney."She never for one second thought those documents were wrong or illegal," Little said.This process occurred when companies were only required to report the issuance of stock options to the SEC within two months of the grant date.Companies would simply wait for a period in which the company's stock price fell to a low and then moved higher within a two-month period.

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