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The courtroom was once again packed with supporters for Greg Reyes.

The court had to wait a few extra minutes until Judge Breyer entered.

After ruling on a few motions and the attorneys from each side sharing remarks Mr. Reyes was given a chance to speak.

He was unable to read his final remarks after being overcome with emotion. The remarks were read by his Atty Stephen Neal.

Judge Breyer then sentenced Gregory Reyes ex-CEO of Brocade to 18 months in a Federal facility and $15M in fines.

Based on the remarks from Breyer it looked as if Mr. Reyes was going to receive a longer sentence and larger fine.

Neither occurred.

This chapter is closed…it will be interesting to see what happens next.

A top flight Contract Mfg has leaked their inside 3rd party security firm has been stealing inventory between assembly shifts. An internal investigation has started and we are waiting for confirmation before we release the names involved.

It always amazes me how fast the news cycles move. The build up, accusations and drama that surround the trial are followed by the spike in buzz once the verdict is announced then silence. Not for the defendant and his family but for everyone else involved. I wonder what happens next? An appeal? A settlement? Another Trial? Was justice really served? What was actually achieved? A man was convicted for an accounting standard that no longer exists for expenses that were non-cash and appears to be the only one in America who is going to go down for this type of alleged crime.  If the system really worked a group of CEO peers with finance experience would have been convened and would have heard the case then told us if this really mattered. But, until the system is fixed the verdict stands. I’ll keep everyone posted on the appeal as it progresses.

I have been sitting on these comments for a nearly a week. Having sat through one of the highest profile securities cases in our Legal Systems history it is clear that the process is broken. The complexity of the topic exceeded the ability of the jurors to accurately deliberate. What lies in the balance is the ability of our system to properly administer justice. As I witnessed first hand that is not possible if the panel does not have the technical experience. The myth is if the facts are presented jurors can understand them and weigh them against the corresponding law. Really? Are you kidding me? I had a hard time following the case and forget applying the law…that added a dimension that put this into orbit complexity wise.

The founding fathers had it mostly right…having your peers settle disputes in open court would more often than not result in an unbiased resolution. But, they could never have fore-seen the complexities of today’s cases and need for experts to adjudicate (my word of the week) such complex issues as FAS123 vs APB25 etc.

The balance of a man’s life was held by people who on average do not even balance their checkbook on a monthly basis. How in Lord’s name could they be capable enough to render a decision in this case. They could render an opinion but not an informed decision. Then you add in the hubris of the Prosecution to win not administer justice and the dilemma begins. How can one receive a fair trial? You can’t. My advice stay out of court, away from the long arm of the Govt and move to Peru (JK). So what do we do now? I think its time for Legal reform. Change the process, incent the players to help find the truth not convict the accused. I know I’m dreaming their is to much money, ego and power in the current system for it to ever to be abandoned. Thought I would try.

How is it possible to be guilty of the follow on charges but not the key to the case…CONSPIRACY? Wow…if Reyes was judged by his peers this would have been done over in an afternoon. More later….

Seems the Jury has some more questions for the Court….stay tuned.

So Day 4 ends and no verdict.

So far no verdict from the Jury just a few notes asking for clarification on a few points….will keep on it until they come back in.

Wonder what the Jurors are talking about? Seems like their may be a few folks looking at the evidence…should be a good think for the Defense.

Still no verdict folks… Are you as anxious as I am?

Today a Stipulation (an agreement) regarding Exhibit 7706 was ordered.

Exhibit 7706 pertained to information about KPMG.

In order to protect the confidentiality of certain KPMG information, Greg Reyes, the Prosecution & KPMG ( non-party) all agree to remove from the record, all pages from Exhibit 7706 except pages 1, 2, 13, 14, & 15.

The Deliberations officially commenced today.

The Jury will be in insolation until they come to a verdict.

I really hope the jury understands how significant this process is, and they are able to see through all of the Prosecution’s fallacies.

The jury was officially “sequestered” by the United States Marshal during their deliberations today.

Sequestering involves isolation of jurors outside of court proceedings, disallowing any external contact.

This process is usually taken only for high profile cases, where the contact with the outside might prejudice the jury’s verdict.

In the Prosecution’s closing argument, they stated how Greg Reyes was issued 13 million stock option shares. However what they failed to mention, and Atty Neal did, was that Greg Reyes exercised only 0.3% of them!

Out of 13 million, he only exercised 40,00 total!

Prosecution, stop leaving out the important facts!

Atty Neal reminded the jury that although Greg Reyes is a defendant in this case, they should not allow the case to forget that Brocade was, and still is a very successful company.

This success was due to Greg Reyes. In his 6 years at Brocade, he increased the revenue from 24 million to 596 million. He built a great company, and Brocade’s growth and success was primarily because of Reyes’ leadership.

Neal talked about the “Dirty Dozen” today and I loved it.  It was a list of 12 things (witnesses or documents) that have been distorted by the government throughout the trial, and I couldn’t agree more.  Of the “Dirty Dozen” topics such as the Beyer testimony, Reyes granting options to himself, Craig Martin’s story, FAS 123 footnotes, Cudgma’s options, Cuevas and Lee’s testimonies, to name a few.

Def. Atty. Neal stated that Craig Martin’s (prosecution’s witness) investigation was bias, and I agree with him.

1. Failed to collect certain critical documents

2. Failed to interview some crucial people at Brocade

3. Paid off and relied on a discharged employee

4.  Allowed Sonsini to determine what documents were given to the government

Closing arguments are done. Jury instructions in the am then its in the Jury’s hands.

Atty Neal points out how the Government also failed to discuss the role of the Audit Committee and how they were ultimately responsible for what is disclosed in financial statements. The Audit Committee also knew of the backdating; They in fact authorized backdated stocks to themselves!

Seems like there are so many players in the game, but Greg Reyes is the one being called out..

Prosecution needed to show that the information in the APB 25 was material to investors, and therefore investors were misled by Brocade’s 10 K forms.

However, the Prosecution failed to present any witness to prove that. The only 2 investors that did testify stated that they did not use the 10 k when making investing decisions.