Should Corporate CEO's go to jail for being dishonest and cheating their investors?

Brocade ex-CEO sentenced to 21 months in options case By Philipp Gollner and Amanda Beck Wed Jan 16, 4:43 PM ET Brocade Communications Systems Inc's (BRCD.O) former CEO was sentenced on Wednesday to 21 months in prison for backdating stock-option grants in a scandal that has ensnared scores of U.S. companies and led to billions of dollars of restatements. Gregory Reyes, 45, was also fined $15 million. He stood calmly as Judge Charles Breyer of U.S. District Court in San Francisco imposed the sentence, but earlier he broke down in tears as he asked Breyer for leniency. Reyes was allowed to remain free pending his appeal. Prosecutors had sought a sentence of 30 to 33 months and fines and restitution totaling $131 million, including at least $47 million that the government says Brocade advanced to Reyes for his defense. Reyes was chief executive of Brocade, a San Jose, California-based data storage network equipment maker, from 1998 to 2005. He was found guilty in August of routinely dating options awards on days when Brocade's stock was low, locking in potential gains if the shares rose. Such backdating is legal only if disclosed and accounted for in company books. "This offense is about honesty," Breyer said. "Every time Gregory Reyes falsified documents repeatedly over a three-year period, he was lying. That is the core of the defendant's criminal conduct." More than 200 companies have disclosed internal audits or investigations by regulators and prosecutors in a scandal in which executives, many of them at Silicon Valley start-ups, routinely backdated options grants without disclosing and accounting for the practice as required by law. Companies involved in the scandal have restated more than $13 billion of past financial reports, and dozens of executives have resigned. Reyes left Brocade in 2005 after company auditors raised questions about backdating practices. Also see--> www ... "If they personally do something illegal, unethical, or not in the best interests of the corporation." Yes, But what about their responsibility to the larger community?

2 years ago - 3 answers