Brocade’s ex-CFO faces options case
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The former chief financial officer of Brocade Communications Systems Inc. was charged with eight counts of civil securities fraud in the company’s accounting of backdated stock option awards.
The Securities and Exchange Commission alleged that Michael Byrd, 45, who served as Brocade’s CFO from 1999 to 2001, knew the company should have been incurring compensation
expenses for certain option grants to workers but failed to incorporate those charges into the financial reports released to investors.
The SEC sued Byrd in U.S. District Court in San Francisco. He is accused of violating various securities laws and defrauding investors by approving faulty financial statements.
Brocade eventually had to restate its results to correct for the mishandled awards, reducing profit by a total of $303 million from 1999 to 2001, according to the complaint.
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