"A federal appeals court overturned the conviction of Gregory Reyes, the former chief executive of Brocade Communications Systems Inc., and accused prosecutors of lying during Mr. Reyes's landmark 2007 stock-options backdating trial. ... In throwing out the conviction, the appeals court didn't dispute that backdating took place or that Mr. Reyes played a key role in awarding such grants to valued employees. But the court said that Brocade's finance department was aware of the practice and the prosecutors knew it. In telling the jury that the finance department didn't know, the government committted 'prosecutorial misconduct,' the appeals court ruled", Philip Shishkin at the WSJ, 19 August 2009, link: http://online.wsj.com/article/SB125062156757340801.html.
Friday, September 4, 2009
The WSJ Criticizes DOJ!
"One of the pleasures of government is the opportunity occasionally to do justice. Team Obama has two such opportunities before it. ... Never mind that this story flew in the face of the publicly known facts or that the government's sole witness, a junior finance department official, later recanted, saying she had been bullied by prosecutors. Hilariously, even as Justice argued in one courtroom that Brocade's finance department had been kept 'in the dark' about backdating, the SEC was simultaneously impaling two former heads of Brocade's finance department for adiing, abetting and benefitting from backdating. In a final indignity, after Mr. Reyes's conviction, the government admitted it knew its central contention was false, thanks to numerous statements from finance department officials. ... Hundreds of executives and companies have been implicated in backdating, but Mr. Reyes was singled out for criminal prosecution on the grounds that he's concealed the practice from his staff. In fact, all the evidence shows backdating was a routine, accepted, mostly uncontroversial practice at Brocade and dozens of other Silicon Valley companies whose CEOs have not been subjected to criminal prosection. ... The ethical culture of the plaintiffs' bar is clearly infiltrating the prosecutor's sanctum. Facts were deliberately distorted to make criminals out of everyday citizens", my emphasis, Holman Jenkins (HM) at the WSJ, 19, August 2009, link: http://online.wsj.com/article/SB10001424052970203550604574358831574964664.html.
HJ, are you serious? Backdating requires violating, among other laws, the FCPA's "books and records" section. Feds suborning perjury is news to you? Get another job. Do you believe prosecutors, particularly feds, do not routinely violate the law? It would be interesting to look at the cases prosecutors decline. I disagree with HJ as to whether Enron's Nigerian Barge deal was criminal. Prosecutors in my opinion behave less ethically than the plaintiffs' bar. HJ, who disciplines errant prosecutors? Are feds exempt from "moral hazard"? That the feds needed a witness to make the Reyes case shows they are incompetent. The case could have been built only on circumstantial evidence. It should have been. The WSJ's big business shills use prosecutorial misconduct to attack the plaintiffs' bar. Amazing.
I agree with the appeals court. Reyes is likely guilty, but like any other defendant he is entitled to a fair trial. Even millionaires are entitled to fair trials? Yes.