Ex-Brocade CEO Greg Reyes in Prison

Brocade Communications Inc.‘s former CEO Greg Reyes has been sentenced to one year and an half in jail and fined $15 million by U.S. District Judge Charles Breyer for illegal stock backdating when he was president and CEO of the FC switch company.

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Reyes singing the blues
and now crying

According to US source, “Before the judge imposed the sentence, Reyes stood up to read a prepared statement, but he began crying so hard that his lawyer had to do it.”

He is accused to have modified the date of stock option of employees when they were recruited to get lower price and then higher compensation when they will sell their stock without publicly disclosing this information to the SEC.

Reyes is scheduled to report to prison in September but is considering an appeal.

The same judge sentenced Reyes to 21 months in prison after a first conviction in 2007 that was appealed.

Last March Reyes was already convicted of frauds and false statements but the jury acquitted him of a conspiracy charge.

Stephanie Jensen, former Brocade’s executive in charge of human resources, was also involved in this operation of illegal backdating and sentenced in 2008 during a separate trial.

Brocade was obliged to pay $7 million in 2007 to the SEC to settle fraud charges and Reyes already paid $12.5 million to settle a lawsuit brought by his former company.

We met Reyes several times for interview. In 2001 he declared:” The odds of Brocade and Cisco being enemies in the future are low“… In another meeting, we were surprised to see him losing his temper after a [tough] question.

In 2002, we asked Steve Duplessie, well known consultant, to told us who was the best CEO in the storage industry. His answer: “[The best CEO] would be Greg Reyes of Brocade.” Brocades’ original founder, Seth Neiman called him the “best CEO of any high tech company.”

Born September 1, 1962, Greg “Gregory” Reyes began his career at Convergent Technologies and then became VP of sales and support at Banyan Systems. In 1998, he was recruited as CEO of Brocade where he led the company to its IPO in 1999. He left in 2005 after becoming one of the first targets of the Justice Department’s campaign to crack down on corporate stock options backdating. He is married with two children and the family is known to be deeply religious in the Christian faith. His father, also named Greg Reyes, emigrated from Cuba to the United States in 1960, was also a main executive in high tech companies.

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