Now in Legal Rebels:
Posted May 30, 2007 12:59 pm CDT
Brocade Communications Systems has dropped Wilson Sonsini Goodrich & Rosati as its defense counsel in an options backdating suit, after a federal judge said the firm had an apparent conflict of interest.
Brocade’s ex-CEO Gregory Reyes has been charged with securities fraud for allegedly backdating options. He has pointed a finger at partner Larry Sonsini, a former Brocade director, saying he recommended that Reyes grant options with little oversight, according to the Recorder.
Brocade’s new firm is Cooley Godward Kronish.
Reyes contends he should not be charged with securities fraud because no reasonable investor would consider backdating material to the company’s value. A federal judge refused to dismiss civil charges based on that argument, according to the San Jose Mercury News, and his ruling could also affect the criminal case against Reyes.