SAN FRANCISCO — A federal appeals court has tossed out the criminal conviction of the first Silicon Valley executive to go to trial in a stock- options scandal that triggered investigations at hundreds of companies and charges against at least a dozen executives.
The 9th U.S. Circuit Court of Appeals ordered a new trial Tuesday for Gregory Reyes, former chief executive of Brocade Communications Systems Inc., citing prosecutorial misconduct. The court said a prosecutor lied when he told the jury that Brocade’s finance department was unaware that Reyes was doling out backdated stock options to company employees.
A judge last year sentenced Reyes to one year and nine months in prison and fined him $15 million after a jury convicted him on all 10 felony counts, including fraud, falsified accounting, conspiracy and filing false financial statements.
