The former vice president of human resources has been convicted of conspiracy and falsifying records in a California District Court
A second former Brocade executive has been convicted for participating in the company’s stock option backdating scandal. She has been found guilty of both charges she faced.
Stephanie Jensen, the former vice president for human resources of Brocade Communications Systems of San Jose, California, has been convicted of one count of conspiracy and one count of falsifying books and records relating to her scheme to backdate options grants to Brocade employees.
The guilty verdicts followed a 2 week jury trial before U.S. District Court Judge Charles R. Breyer. The conviction is the result of an investigation by the Federal Bureau of Investigation (FBI) and the United States Securities and Exchange Commission (SEC).
Evidence at trial showed that Jensen of Los Altos, California, schemed to price option grants to Brocade employees by using historical stock performance data to pick low prices while backdating the grant minutes to hide when the options were actually granted. By this scheme, Jensen enabled Brocade to improperly avoid recognizing compensation expenses that would have reduced the company’s reported net income.
Scott Schools commented: “The jury’s verdict re-emphasizes that backdating option grants, when it is done with an intent to deceive, is a crime. The integrity of our stock markets depends on the accuracy of the books and records of a public company. Accordingly, prosecuting securities fraud and manipulation will remain one of this office’s top priorities.”
The maximum statutory penalty for each count is a term of imprisonment of up to 20 years and a maximum fine of $5,000,000.