In 1995 the company moved from its Westwood, Los Angeles office to Irvine, California.
Backdating isn't illegal, but failing to disclose or properly account for the practice in financial statements constitutes felony securities fraud.
Reyes' lawyer Richard Marmaro said in a statement, "Greg did not enrich himself or gain personally from Brocade's stock-option-granting practices, and the government never even accused him of that." William Leone, an attorney with Faegre & Benson LLP who served as a U. Attorney and member of the Colorado Securities Fraud Task Force, said that the verdict against Reyes helps establish two things: one is that "it's not necessarily true that you have to have personal profit to be convicted of the crime," while the other is that options backdating "is not so complicated that a jury can't understand this stuff." While companies may legally date option grants whenever they choose, as long as they publicly disclose it, a jury member who is not from the corporate world may look askance at the practice, Leone said.
One factor executives possibly facing similar trials need to consider, Leone said, is "the people who are going to sit in judgment of what you've done, who get to think about how it looks." One of the prosecutors in Reyes' trial, assistant U. Attorney Timothy Crudo, is involved in deciding whether to bring criminal charges over backdated options at Apple Inc., according to a report in The Wall Street Journal.
Breyer refused to dismiss the charges last Friday, stating that even under the defendants preferred interpretation of honest services fraud, the charges fall within it.
Brocade, a software and Fibre Channel storage switch maker in San Jose, was founded in the late '90s during bubble-blowing, glory days for stock option grants to new employees in Silicon Valley was a common practice.
Broadcom is among Gartner's Top 10 Semiconductor Vendors by revenue. In 2012, Broadcom's total revenue was .01 billion. 327 on the Fortune 500, having climbed 17 places from its 2012 ranking of No. Broadcom shareholders will hold 32% of the new Singapore-based company to be called Broadcom Limited.
Hock Tan, Avago President and CEO, will be the new CEO of the new combined company. Samueli will be Chief Technology Officer and member of the combined company's board. Nicholas will serve in a strategic advisory role within the new company.
Reyes' conviction will surely capture the attention of current and former technology executives who managed their companies throughout the dotcom heyday and long before Sarbanes-Oxley compliance rules were mandated.
Reyes' conviction could also give federal prosecutors additional confidence to prosecute high-profile executives at other companies that have admitted to improperly disclosing or accounting for option grants.
Former Brocade human resources executive Stephanie Jensen is awaiting trial on criminal fraud charges for her alleged role in the company's backdating scheme.
Several former Brocade human resources department employees testified against Reyes.