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.
Reeves states that in deed APB 25 was discredited. However, he states that tech companies like Brocade did everything in their power to keep APB 25 because FAS 123 would hurt their earnings, performance, and stock price. Well then why did Reyes and Brocade use FAS 123 throughout the 2000-2004 periods?
Of the points Reeves made in his rebuttal he stated that Reyes lied in the Craig Martin interview. He referred to emails between Reyes and Bidzos where Reyes stated that backdating is in fact illegal. Well what he did not reveal to the jury, the most critical part, the subject of those emails, Section 16 Officers. This is when it is actually illegal to backdate because the grants need to be reported to the SEC within 48 hours. Well Reyes, new this, reported appropriately, and broke no laws.
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.!!!
Pros. Reeves tells the jury that “Reasonable doubt is based on reason, not speculation.” However, in my opinion, that is exactly what he has put into the jurors minds with all of the witnesses they have called, with all the misleading testimonies. Def. Atty. Neal states that speculation is not credible evidence, a speculation testimony has no place in a court room. Hopefully the jury will see this and be aware of what is going on!
Another point that the prosecution made was “Proof Beyond a Reasonable Doubt.” They believe they have proof based on reason and common sense. Well bringing up the quote “It’s not illegal if you don’t get caught” is not good proof in my opinion. Def. Atty. Neal shot that one right down during cross when bringing up the fact that the witness wasn’t even certain that Reyes was referring to backdating when he made that comment. Sounds like reasonable doubt to me.
Prosecution makes a point that Greg Reyes is innocent if “he possessed a good-faith belief that the alleged false or misleading statements were accurate.” Well then he is innocent because there is no evidence that states that Reyes knowing or willfully cheated or deceived his finance department. They knew everything, they were all over it.
I would seem based on the govt’s closing statements today they would have you believe backdating was illegal and Reyes hid the whole process from the Finance department…wow not true.
The Govt would have you believe that Reyes cashed in backdated options and that is why he concocted up the scheme. When in reality 99.7 % of the options were never cashed in. So all of this for 40K options?
The Govt attempted to show Reyes understood APB25 when all of the Govt witnesses were confused themselves and the accounting boards themselves abolished the standard.
Back to our comments from two weeks ago…why are we here? What did Reyes do except grant options to attract employees. Where are the Govt witnesses to say they didn’t know about this?
I guess I could keep going through the Govt’s case….but why….I am still befuddled why they could assert criminal intent.
Everyone know….accounting elected to reflect that comp charges under FAS 123….hello!!!
According to the prosecution Greg Reyes’ Crime is:
1. Scheme to Defraud
2. Conspiracy
3. False SEC Filing
4. False Statements to an Accountant
5. False Books and Records
However, I feel they are missing one key piece… The LINK that ties Reyes to any of this.
The prosecution gives their closing arguments first… Anderson begins by thanking the jury for their commitment to the case and says it is up to them to decide what is true or false in the case. “This is when the lawyers who have worked so hard will step back.” Sorry Anderson, but this came off a little condescending and patronizing if you ask me… I think the jury knows what they need to do.
The court room is packed, just like it was the first day. People are standing in the in the back of the court room. The judge gave 3 steps about closing arguments to the jury:
1. Argumentative Council: The prosecution and defense will give their views as to what the evidence has shown in the case.
2. Instruction on the Law
3. Deliberation
The judge met with both legal teams this morning to discuss the motion by the defense for a mistrial. The first words out of Judge Breyer’s mouth upon sitting down were that the motion for mistrial was denied as there is no evidence that Byer’s testimony was falsified.
Today the government had one of it’s special agents reading a couple press releases into evidence and then rested its case! With that, the jury has the rest of this week and next week off.
Seems the Prosecution has a problem with more testimony.
Check this out:
Brocade
Mistrial sought….wow….
Lawyers for former Brocade Communications Systems CEO Greg Reyes asked a federal judge to declare a mistrial in his stock-options backdating case, saying a prosecution witness gave false testimony. A former member of San Jose-based Brocade’s human-resources department testified March 1 at Reyes’ trial that the stock options granting process at his former employer, KLA-Tencor, didn’t involve “look-back pricing” that was used at Brocade, Reyes’ lawyers said in a filing Wednesday in federal court in San Francisco. San Jose-based KLA-Tencor restated financial results in 2006 and was sued by securities regulators in 2007 because it backdated stock option grants, the filing said. “There is no doubt that the government knows” that two KLA-Tencor grants discussed by the witness “were backdated,” Neal Stephens, an attorney for Reyes, said in the filing.
— Bloomberg News
The prosecution stated that during the Martin/Reyes interview Reyes refused to answer questions… However, Def. Atty. Neal later brought to the attention of the court that the question he refused to discuss was a situation of an affair between two Brocade employees (Reyes not being one of them) and how their settlement had been funded. Well, I would refuse to discuss that too!
Seems like the last exchange of redirects was a non-story.
Greg Reyes stated in the interviews that he didn’t recall seeing the stock price sheet… Maybe that is because Stephanie Jensen (Head of HR) and Mike Byrd (CFO) had it and were picking prices themselves for Reyes to sign off on?
Martin stated that he can only testify to his own recollections from the interviews… Well these interviews happened back in 2004 and 2005… How good are your recollections? A man’s life is on the line here.
Seems like the Govt has a Witness that interviewed Mr. Reyes on two occassions about various topics at Brocade related to Backdating and the process.
The bottom line was things were hazy with the process and Mr. Reyes’s recollection was different that Stephanie Jensen’s as far as any wrong doing Mr Reyes’s denies any and we shall see what happens on cross.
Craig Martin, a new witness called by the prosecution is a partner at the Morrison & Forester Law Firm. He conducted two interviews regarding finances at Brocade with Mr. Reyes. They made a big deal about Reyes having a lawyer present at the second interview… But let’s think about that, there are two or more lawyers present representing Morrison and Forester at the interview, why shouldn’t Greg have his lawyer present? Was it an actual interview or an interrogation?
