News

posted on 05 March 2008 14:27

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A group of lawyers is seeking damages 'for the benefit of Brocade' from ex-Brocade CEO Gregory Reyes and ex-Brocade VP human resources Stephanie Jensen, as a result of these two being convicted for backdating stock options.

Reyes was convicted of securities fraud by a jury in San Francisco on August 7, 2007, and sentenced on January 16, 2008 to 21 months in jail. Jensen was convicted later, on December 6, 2007, of conspiracy to commit securities fraud and of falsifying Brocade’s books and records. She is awaiting sentencing.

A firm of lawyers involved for the plaintiffs as co-lead counsel, Johnson Bottini, LLP, have announced that several motions in the case will be heard on March 28, 2008 in Santa Clara, California. Through them the plaintiffs are seeking to amend the complaint. They believe that the damages Brocade has suffered exceed $200 million. Their amendment involves forcing Brocade's directors to seek declaratory relief against Reyes and Jensen. Any money recovered would go into Brocade and shareholders would benefit 'derivately' because Brocade would become more valuable.

If Brocade was to collect money from Reyes and Jensen in such an event then it is expected Johnson Bottini would apply to the court to have a percentage awarded to them as a contingency fee.

The lawyers are seeking Brocade shareholders to join in the case.

An attorney involved in a similar Johnson Bottini move against stock option-backdating directors of Engineered Support Systems Inc. has described their actions as 'disgusting.'