Real Time Media

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.

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.

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.

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.

Atty Neal gave his own instructions to the jury to remind them that it is not illegal to backdate options, or even for failing to apply accounting rules.

If it is not illegal for these things, how can there be 10 counts of crimes against him?!

Atty Neal critiques the Prosecution, and how they did not present any witnesses who could explain details of APB 25.

The Govt is so quick to point the finger at Greg Reyes for not applying APB 25 standard, when they cannot even find one witness who can testify to understanding the standard!

Not to many surprises by Pros Reeves…a lot of speculation and a few new theories. Oh yeah, he asked the Jury to ignore Defense Atty Neal’s arguments based on speculation…but not his.

Does this guy write this stuff in a vacuum. I wish I could find the book he pulls these new theories from…scary he is in a position of power.

I am amazed the Govt can make such misleading statements in a rebuttal but that is the process….no wonder Neal spent so much time creating doubt on what the Govt would say….its with the Jury have faith they can see through the smoke…our system does work…we should all pray it does.!!!

I know we are supposed to wait for the Govt’s rebuttal but I felt like clapping. Amazing closing argument. I will recap his long closing later…bottom line the Govt has so many defects with its case its kind of scary the case is still going on.

It will be interesting to see what the Govt says in their 90 minute rebuttal.

Here comes the kitchen sink, get the waiters out, the stories and BS I’m sure will be flyin.

We are on break.

Should be the last bit before the jury deliberates…Tuesday.

Wow…Neal is tough.
I love his 20 questions…I wonder how the Jury will review them?

Atty Neal begins his strong closing argument by explaining to the jury how the Prosecution’s evidence was taken out of context.

Specifically in reference to Craig Martin’s testimony:
On cross examination, it was clear that Martin was testifying about things that were completely inconsistent, basically putting words in Reyes’ mouth.

He also responded about 50 times (during cross-examination), that he “didn’t remember” things discussed during his conversation with Reyes.

Once again Defense Atty Neal has established Finance know what was going on. Everyone at Brocade received these options. was not in questions. The assertion that Reyes misled and hid the fact from Finance is….with this one notion the GOVT’s case FALLS APART….think about it.

If Finance knew:
1. No conspiracy then
2. If they understood backdating was going on then ACCT choose to use FAS123 knowingly instead of APB 25.
3. False books and records- the Audit Committee understood what was going on so they did not have a problem with the 10K’s to Reyes signed in GOOD FAITH.

No legs to stand on…so if Finance was so important why not even mention them in your closing? Because you know what they were going to say….they knew…and so the cheap suit they are trying to hand on Reyes begins to unravel.

Break for lunch….