Real Time Media

If Miotto “did not investigate,” what is his basis for calling it thorough and/or reliable??

Miotto is just as unreliable as the investigation itself.

Atty Neal makes yet another good point.

How is dilution a bad thing?  Yes, a Shareholders number of shares seem less if more people buy shares, but ideally isn’t the value of those SH’s share higher since the company’s more profitable???!

When asked if a vesting period was important to Fidelity when voting for shares, McCormicks answer No.

Defense Atty Neal made a strong point that 94% of the backdated options that were issued expired- without getting pocketed at all. So it is unfair for the Gov’t to say that Reyes motivation was self interest, especially when they already established how granting options was a recruitment technique.

Overall, the Reyes’ Defense team (Atty Stephen Neal) had a clear and strong opening statement-highlighting on key “missing links” of the case. And the overall complexity of issues involved- issues Reeves failed to mention or purposely avoided. It could be possible that this was a foreshadowing of how the Gov’t will try to “avoid” key issues during the rest of the trial..

Defense Atty Neal spoke of reasons why the prosecution case fails:

-Finance Dept made the decisions..

- Backdating is NOT illegal

- Brocade did in fact make ample disclosures ( FAS 123- a much better accounting standard)

- Reyes did not deceieve.. nor had the intent to.

-And the case is focused on an abandoned standard (APB 25)

“But for APB 25, there would be no case.”

In my opinion it seems quite mind boggling that the Reyes case is centered around APB 25, a discredited accounting practice which was abolished in  December 2004, and no longer used by any company. It was highly criticized method for being too confusing and unclear, and yet it still seems to play such a major role.

If KPMG even needed Guidance on it, how are CEOs and other non-accountants expected to understand it???

Defense Atty Neal opening statement was the perfect counter to Pros. Reeves’ statement. It seemed almost as if Neal was already prepared for what Reeves had to say, or maybe he is just that good.

Neal clearly stated that in order for Greg Reyes to be guilty, the prosecution must prove that Reyes had knowledge (of the backdating), that he had the intent to deceive, and to find the link between the backdating and the noncompliance with APB 25.

Defense Atty Neal made it clear to the jury that since this is a criminal trial, the prosecution has the burden of proof, meaning that the defense doesn’t necessarily have to do anything. And in order for Reyes to be found guilty, they must be convinced “beyond a reasonable doubt” that he is guilty.

Brocade made AMPLE disclosures to FAS123, so is it valid to say that “there was a failure to disclose” ??? I think not.  Thank you Atty Stephen Neal for clearing up Adam Reeve’s invalid statement.

In his opening statement, Pros. Adam Reeves spoke of  Reyes’ responsibilities as CEO, but they failed to mention a key component in this case: BROCADE’S FINANCE DEPARTMENT. They are the ones, including the Legal Department, who are hired for accounting specifically and are the ones making the decisions.