Brocade Execs Plead Not Guilty in Stock Options Case
San Francisco – The first two executives ensnared in the nation’s stock options scandal pleaded not guilty in federal court to charges of making false statements to securities regulators, falsifying records and other charges.
Gregory Reyes, former chief executive of Brocade Communications Systems Inc. and Stephanie Jensen, Brocade’s former vice president of human resources, were originally charged with one count each of securities fraud in a criminal complaint on July 20 and indicted with additional charges Aug. 10.
Authorities allege the backdating of stock options was, in part, cause for the company to restate financial results for fiscal years 1999 through 2004, shaving 20 cents off previously reported earnings per share figures.
Reyes is free on $2 million bail and Jensen on $500,000 bail. They face as many as 20 years in prison if convicted. The pair have argued that any backdating was meant to attract employees to the San Jose-based maker of data storage devices, not to skew financial results.
A trial date was not immediately set.
Dozens of U.S. companies have disclosed that their stock options practices are being investigated by the Department of Justice or the Securities and Exchange Commission. Three other executives at New York-based Comverse Technology Inc., a leading maker of voicemail software, are accused of hatching a scheme to pocket millions by secretly manipulating and backdating stock options – bringing to five the number of executives caught in the government’s backdating dragnet.
TiVo loss widens in fiscal 2Q due to legal costs
San Francisco – TiVo Inc. reported a quarterly loss that was seven times greater than the red ink a year ago, due largely to hefty legal costs associated with a high-stakes intellectual property patent dispute.
In the three months ending April 30, the digital video recorder company said Wednesday it lost $6.45 million, or 7 cents per share, compared to a loss of $892,000, or 1 cent per share, in the year-ago period.
Revenue rose 50 percent to $59.2 million, from $39.3 million a year ago.
“Despite a traditionally slower summer consumer electronics selling period, coupled with no exceptional advertising spend, we were able to continue to build momentum relative to last year’s results and meet and exceed our second quarter guidance for revenues and net income,” TiVo CEO Tom Rogers said in a statement.
The company has seen its competitive position shrink as cable companies, satellite television operators and electronics makers scramble to offer a version of the DVR. But TiVo has claimed successor models infringe its 2001 patent on the underlying technology and that makers should license the technology.
