Comments on: Greg Reyes’ Day in Court

By: Raul

Raul — Mon, 07 Apr 2008 17:47:23 +0000

As time goes by, I’m still waiting for other execs to go down in flames as Greg Reyes did, but nothing is happening. Some execs are paying SEC fines with no acceptance of guilt and walking away. I don’t want to name names, but just look at some of the semiconductor companies that where the most aggressive about stock option compensation and backdating. I’m thinking of one particular CEO of an IC company that was VERY vocal about his opposition to stock option expensing. He just paid a fine and he’s done. So I’m not sure why Greg Reyes is the guy that stands out in this crowd. I didn’t even know who he was until the trial came up.
So I have to wonder, why Greg? Why only Greg so far? The only other person to go down on this has been also from Brocade. So why so much focus on that particular company? Did all the other companies not change the dates on the grants? I mean, I thought that is what backdating stock options is all about. So why not prosecute them?
Last time I checked, our constitution supposedly guarantees to every citizen equal protection under the law. So I don’t understand this theory of making examples of people, why is it OK to selectively prosecute?

By: Lesson in Reyes’ Prison Sentence: Backdating ain’t ‘It.’ Honesty is. « FoundRead

Wed, 16 Jan 2008 23:43:55 +0000

[...] written about what founders and other business people can learn from this case ourselves, here and [...]

By: carleen

carleen — Fri, 22 Jun 2007 14:10:28 +0000

Hi Seth, thanks for your comment. I don’t think Spitzer was trying to encourage bad behavior, or secrecy. I suspect he was playing Devil’s Advocate (in a way that only the most provacative lawyers can) to prove a point. He’s really saying you *should not* try to cover your tracks, such as email your staff to shred documents, or email your staff to backdate stock options. But yours is a useful and interesting perspective. Best, Carleen}

By: sethx1138

sethx1138 — Fri, 22 Jun 2007 13:55:12 +0000

I don’t agree with #1. It should read “Be honest and ethical. Talk, write, and email as much as possible.”

If you are honestly trying to follow the rules (even those as capricious as SEC and FASB regulations) it would seem that you would want as much documentation as possible showing that you are obeying the law. I admire Eliot Spitzer, and I’m surprised that he (and Found|Read) is giving advise on how to cover ones tracks.

To many it sounds crazy, but I still believe that you can run an aggressively competitive company and be ethical.

I’m doing it here in Mexico, of all places.}

By: adambenayoun

adambenayoun — Tue, 19 Jun 2007 18:01:16 +0000

Great article Carleen!}