Gregory Reyes

After graduating from high school, Reyes attended Saint Mary's College of California in Moraga, California, where he obtained a degree in Business Administration in 1984. During his studies there, Reyes obtained an internship with Convergent Technologies (Unisys) in its sales department. Reyes began working full-time position at Convergent while taking evening classes in order to complete his degree. After obtaining his degree, Reyes became an OEM sales representative for Convergent, then left to become Vice President of Sales and Support at Banyan Systems, a networking and data communications software firm.

Reyes obtained his first CEO position with Wireless Access, a Silicon Valley start-up company specializing in two-way pagers. Reyes served as President and CEO until Wireless Access was bought out in 1997 by Glenayre Technologies.Author Unknown(n.d.), [http://www.gregreyesceo.com/ Gregory Reyes: CEO of his Life], www.gregreyesceo.com, Retrieved 2010-02-03{{Unreliable source?|date=August 2011}}

In 1998, Reyes became the CEO of Brocade Communications, where he led the company to its initial public offering in 1999. As CEO of Brocade Communications, Reyes sold SAN (storage area network) infrastructure to a number of companies, including IBM, EMC Corp., Compaq, Dell, NEC, and HP.

During Reyes's time as CEO, Brocade was the largest manufacturer of networking equipment that provides data storage in the world. Under his leadership, the company went public in May 1999, growing from a small startup business into one of the largest and most successful technology companies in the Silicon Valley—a leadership position that it maintains to this day. Brocade showed 7 quarters of profitability and revenue growth during that time—in the first two years alone, revenue growth exceeded 150% altogether.Author Unknown(n.d.), "BROCADE COMMUNICATIONS SYSTEMS INC CIK#: 0001009626 (see all company filings)", https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001009626&owner=exclude&count=40, Retrieved 2010-02-03 In addition, Reyes actively pursued the recruitment of more than 1,150 employees, multiplying the company's workforce by a factor greater than six from 1999 to 2002Author Unknown (2006), "comp19768", https://www.sec.gov/litigation/complaints/2006/comp19768.pdf, Retrieved 2010-02-03 until the company implemented massive layoffs in response to the burst of the dot-com bubble.

Reyes resigned from Brocade when he was indicted by the U.S. government for accounting irregularities associated with corporate stock options backdating. Reyes was originally convicted in 2007, but the conviction was overturned on appeal. He was retried in 2010, and again convicted; the second conviction was upheld on appeal.

Reyes is the first corporate official to be convicted of concealing stock options backdating in the United States.Egelko, Bob(2008), San Francisco Chronicle, [https://www.sfgate.com/cgi-bin/article.cgi?f=/2008-01-17/bay-area/17151629_1_gregory-reyes-brocade-communications-systems-stock-options Brocade executive sentenced to 21 months in prison],

In June 2005, Brocade announced that the U.S. Securities and Exchange Commission had undertaken an investigation into the company stock option accounting.{{cite news|title=Gregory Reyes case timeline|url=http://www.mercurynews.com/breaking-news/ci_14765678?source=pkg|accessdate=August 16, 2011|newspaper=San Jose Mercury News|date=June 24, 2010}} In August 2006, the U.S. government indicted Reyes on 12 counts of securities fraud, two of which were later dropped.

Reyes's trial began on June 18, 2007, making it the first criminal trial in which a backdating prosecution was considered before a jury.

In the trial, Reyes stated that he had no intent to deceive anyone, and that his decisions relied largely in good faith on the accuracy of documentation provided by Brocade's finance department, which incorrectly accounted for stock options in Brocade's financial statements that he signed in good faith and with the belief that they had been properly accounted for.

Elizabeth Moore, a key witness to Reyes's conviction and the only employee of Brocade's finance department to be called during the proceedings, testified that neither she nor any other members of the finance department had any knowledge of backdating or fraudulent occurrences within the organization. After the trial's conclusion, however, Moore recanted her testimony, claiming that she had been bullied and pressured by the prosecution to give false testimony. In a letter to Fortune Magazine she told an editor that she, as well as other high-ranking members of the finance department, had been aware of the practice of backdating stock options to rank-and-file employees.

Moore's conflicting statements were not disclosed during the trial, and prosecutor Adam Reeves made numerous statements to the jury using Moore's testimony to support his argument that Reyes had deceived Brocade's finance department; he presented a diagram to illustrate that no one in the finance department was aware of the backdating; he made statements in his closing arguments claiming that employees of the finance department did not have any idea that the backdating had occurred, adding that the government's theory, based on their investigational findings, supported this conclusion.

Reyes filed a motion for a new trial on the grounds of prosecutorial misconduct, which was denied by the district court. On January 16, 2008, Reyes was found guilty of 10 counts of fraud and conspiracy, including falsifying corporate accounting books and records, and participating in a stock options backdating scheme. Reyes was sentenced to 21 months in prison in addition to a $15 million fine, making him the first executive to be convicted of the concealment of stock options backdating.{{cite court |litigants=United States v. Gregory Reyes and Stephanie Jensen |vol=577 F.3d 1069 |reporter=F.3d |opinion=1069 |court=9th Cir. |date=Aug. 18, 2009 |url=http://www.ca9.uscourts.gov/datastore/opinions/2009/08/18/08-10047.pdf |quote=}}

On August 11, 2007 Reyes was convicted on 10 counts of illegally backdating stock options while serving as CEO of Brocade.[http://linux.sys-con.com/read/414771.htm Ousted Brocade CEO Convicted On All 10 Counts Of the Criminal Backdating Charges] {{Webarchive|url=https://web.archive.org/web/20070928021559/http://linux.sys-con.com/read/414771.htm |date=2007-09-28 }}, linux.sys-con.com, Aug. 16, 2007 In January 2008, he was sentenced to 21 months in prison and received a $15 million fine.[http://www.infoworld.com/article/08/01/17/Brocades-Reyes-gets-21-months-in-backdating-case_1.html Brocade's Reyes gets 21 months in backdating case], Stephen Lawson, IDG News Service, January 17, 2008 (via www.infoworld.com, retrieved Dec. 5, 2008) U.S. District Judge Charles R. Breyer, the sentencing judge, refused to grant the defense request for a sentence of no more than 13 months, to be served in a halfway house rather than prison.[http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/01/16/BAEDUGBV5.DTL Brocade ex-CEO gets 21 months in prison for stock options scheme], Bob Egelko, San Francisco Chronicle, January 17, 2008

In August 2009, the Ninth Circuit Court of Appeals reversed Reyes's conviction due to prosecutorial misconduct in making a false assertion of material fact in its closing argument to the jury.{{cite news |first=Karen|last=Gullo|title=Ex-Brocade Chief Gregory Reyes Wins Bid for New Trial|work=Bloomberg |date=August 18, 2009 |accessdate=August 18, 2009|url=https://www.bloomberg.com/apps/news?pid=20601087&sid=aioApQz0Ju4c}} In October 2009, federal prosecutors requested the Ninth Circuit to strike its finding of prosecutorial misconduct, but declined to request that the court reverse the judgment itself;{{cite news |first=Howard |last=Mintz|title=Prosecutors do not contest ruling overturning former Brocade CEO's backdating convictions|work=San Jose Mercury News|date=October 16, 2009 |accessdate=October 16, 2009|url=http://www.mercurynews.com/business/ci_13573695}} that request was denied November 6.{{cite news |first=Dan|last=Levine|title=9th Circuit Stands Firm on Prosecutors' Misconduct in Reyes Backdating Case |work=The Recorder |date=November 9, 2009 |accessdate=November 8, 2009 |url=http://www.law.com/jsp/article.jsp?id=1202435269302&th_Circuit_Stands_Firm_on_Prosecutors_Misconduct_in_Reyes_Backdating_Case__}} In December 2009, Northern California legal newspaper The Recorder reported that prosecutors had reached a decision to retry Reyes.{{citation |author=Levine, Dan|title=Retrial on Tap for Reyes |work=The Recorder |date=December 1, 2009 |accessdate=December 1, 2009 |url=http://www.law.com/jsp/article.jsp?id=1202435959246 }}{{citation |author=Beck, Susan|title=Brocade's Indemnification Tab to Rise with Expected New Trial for Reyes |work=law.com |date=December 1, 2009 |accessdate=December 1, 2009 |url=http://www.law.com/jsp/tal/digestTAL.jsp?id=1202435945808 }}

In the appeal, the National Association of Criminal Defense Lawyers had supported Reyes with an amicus brief urging reversal.[http://www.nacdl.org/public.nsf/newsreleases/2008mn22?OpenDocument National Criminal Defense Bar Assn. Files Amicus Brief in Appeal of First Stock Options Backdating Conviction] {{Webarchive|url=https://web.archive.org/web/20080918200927/http://www.nacdl.org/public.nsf/newsreleases/2008mn22?OpenDocument |date=2008-09-18 }}, NACDL Press release, September 12, 2008. The NACDL also made a copy of the amicus brief [http://www.nacdl.org/public.nsf/newsissues/amicus_attachments/$FILE/Reyes_Amicus.pdf available online] {{Webarchive|url=https://web.archive.org/web/20100305002805/http://www.nacdl.org/public.nsf/newsissues/amicus_attachments/$FILE/Reyes_Amicus.pdf |date=2010-03-05 }}. Reyes was represented in the appeal by former U.S. Solicitor General Seth Waxman.{{cite news |first=Howard |last=Mintz |title=Brocade's Reyes hopes to reverse stock options backdating convictions |work=San Jose Mercury News |date=May 8, 2009 |accessdate=May 11, 2009 |url=http://www.mercurynews.com/ci_12331758 }}

Reyes's second backdating trial (or retrial) commenced on February 22, 2010, in U.S. District Judge Charles Breyer's court room. Reyes was charged with 1 count of falsifying books and records, 4 counts of lying to auditors, 4 counts of security fraud, and 1 count of conspiracy.

On March 26, 2010, the jury found Reyes guilty on 9 charges and was acquitted on the conspiracy charge. Reyes's attorney stated that Reyes will likely file another appeal. On June 24, 2010, Reyes was sentenced to 18 months' incarceration and a $15 million fine.{{cite news |url=http://www.mercurynews.com/top-stories/ci_15368224 |title=Brocade ex-CEO Reyes sentenced to 18 months in prison, $15M fine |date=2010-06-24 |last=Bailey |first=Brandon |work=San Jose Mercury News |accessdate=2010-06-24}} Reyes was incarcerated at the Taft Correctional Institution in Taft, California;Federal Bureau of Prisons [http://www.bop.gov/iloc2/LocateInmate.jsp Inmate Locator] {{Webarchive|url=https://web.archive.org/web/20130911025627/http://www.bop.gov/iloc2/LocateInmate.jsp |date=2013-09-11 }}, query for inmate no. [http://www.bop.gov/iloc2/InmateFinderServlet?Transaction=NameSearch&needingMoreList=false&FirstName=Gregory&Middle=&LastName=Reyes&Race=U&Sex=U&Age=&x=72&y=10 98008-111] {{Webarchive|url=https://web.archive.org/web/20120916082324/http://www.bop.gov/iloc2/InmateFinderServlet?Transaction=NameSearch&needingMoreList=false&FirstName=Gregory&Middle=&LastName=Reyes&Race=U&Sex=U&Age=&x=72&y=10 |date=2012-09-16 }}, accessed October 14, 2011. he was released on December 29, 2011.Federal Bureau of Prisons [http://www.bop.gov/iloc2/LocateInmate.jsp Inmate Locator] {{Webarchive|url=https://web.archive.org/web/20130911025627/http://www.bop.gov/iloc2/LocateInmate.jsp |date=2013-09-11 }}, query for inmate no. [http://www.bop.gov/iloc2/InmateFinderServlet?Transaction=NameSearch&needingMoreList=false&FirstName=Gregory&Middle=&LastName=Reyes&Race=U&Sex=U&Age=&x=72&y=10 98008-111] {{Webarchive|url=https://web.archive.org/web/20120916082324/http://www.bop.gov/iloc2/InmateFinderServlet?Transaction=NameSearch&needingMoreList=false&FirstName=Gregory&Middle=&LastName=Reyes&Race=U&Sex=U&Age=&x=72&y=10 |date=2012-09-16 }}, accessed January 24, 2011. He appealed this second conviction to the Court of Appeals for the Ninth Circuit, which heard oral argument on May 10, 2011.{{cite news| last=Mintz |first=Howard |title=Former Brocade CEO's case heads to federal appeals court |url=http://www.mercurynews.com/breaking-news/ci_18010705 |accessdate=May 10, 2011 |newspaper=San Jose Mercury News |date=May 6, 2011}}United States of America v. Gregory Reyes, no. [https://ecf.ca9.uscourts.gov/cmecf/servlet/TransportRoom?servlet=CaseSummary.jsp&caseNum=10-10323&incOrigDkt=Y&incDktEntries=Y 10-10323] {{registration required}}, Ninth Circuit Court of Appeals, PACER search, retrieved August 16, 2011 The court affirmed the conviction October 13.[http://www.ca9.uscourts.gov/datastore/opinions/2011/10/13/10-10323.pdf USA v Reyes], 10-10323 (9th Cir. Oct. 13, 2011). Retrieved October 14, 2011.{{cite news |last=Egelko |first=Bob |title=U.S. court upholds convictions of ex-Brocade CEO |url=http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/10/14/BUDR1LHBG5.DTL |accessdate=October 14, 2011 |newspaper=San Francisco Chronicle|date=October 14, 2011}} On February 10, 2012, Reyes petitioned the U.S. Supreme Court for a writ of certiorari, asking the court to review the case.{{cite news |last=Mintz |first=Howard |title=Former Brocade CEO takes his case to U.S. Supreme Court |url=http://www.mercurynews.com/breaking-news/ci_19970917 |accessdate=February 15, 2012 |newspaper=San Jose Mercury News |date=February 15, 2012}}Reyes v. United States, no. 11-1003, petition for certiorari ([https://www.supremecourt.gov/Search.aspx?FileName=/docketfiles/11-1003.htm docket]). February 10, 2012. Retrieved February 15, 2012. The petition was denied the following month.{{cite news |last=Egelko |first=Bob |title=Supreme Court denies appeal by Brocade's ex-CEO |url=http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/03/18/BULN1NN1P6.DTL |accessdate=March 19, 2012 |newspaper=San Francisco Chronicle |date=March 19, 2012}}

In addition to the criminal proceeding, Reyes has also been named in several civil lawsuits in state and federal courts,Securities And Exchange Commission v. Reyes et al., no. [http://dockets.justia.com/docket/court-candce/case_no-3:2006cv04435/case_id-182631/ 3:2006cv04435], N.D. Cal., filed July 21, 2006; Pace v. Bidzos et al., no. [http://dockets.justia.com/docket/court-candce/case_no-5:2007cv03742/case_id-194264/ 5:2007cv03742]. N.D. Cal. , filed July 19, 2007; Jones v. Brocade Communication Systems, Inc. et al., no. [http://dockets.justia.com/docket/court-candce/case_no-3:2007cv03804/case_id-194445/ 3:2007cv03804], N.D. Cal., filed July 25, 2007; and Huang et al. v. Reyes et al., no. [http://dockets.justia.com/docket/court-candce/case_no-3:2007cv05950/case_id-198070/ 3:2007cv05950], N.D. Cal., filed November 26, 2007; In Re Verisign, Inc. Options Litigation (Mykityshyn V. Bidzos), no. [http://www.sccaseinfo.org/pa6.asp?full_case_number=1-07-CV-085890 1-07-CV-085890], Cal. Superior Ct., Santa Clara County, filed May 15, 2007. stemming from the backdating, including one federal suit filed by the U.S. Securities and Exchange Commission, which he settled in August 2011 for $845,000.{{cite news|last=Gullo|first=Karen|title=Ex-Brocade CEO Reyes Agrees to Pay $845,000 to Settle Claims by U.S. SEC|url=https://www.bloomberg.com/news/2011-08-15/ex-brocade-ceo-reyes-to-pay-845-000-to-settle-sec-claims-over-backdating.html|accessdate=August 16, 2011|newspaper=Bloomberg|date=August 15, 2011}} Reyes settled one of the other suits, a derivative suit brought by Brocade shareholders on behalf of the company, in June 2009, for a reported $12.5 million.{{cite news |first=Zusha |last=Elinson|title=Brocade's Closely Watched Backdating Lawsuit Ends in the Red |work=The Recorder |date=June 19, 2009 |accessdate=June 19, 2009 |url=http://www.law.com/jsp/article.jsp?id=1202431585820 }}

After Reyes was released from prison, and after his probation had ended, he attempted to purchase a handgun, and was denied when the background check revealed that he was a convicted felon.{{cite news |last1=Pavlo |first1=Walter |title=Ruling Clarifies That Some White-Collar Felons Can Possess A Firearm |url=https://www.forbes.com/sites/walterpavlo/2018/10/05/ruling-clarifies-that-some-white-collar-felons-can-possess-a-firearm |accessdate=February 22, 2019 |work=Forbes |date=October 15, 2018 |language=en}} In 2017, Reyes sued for a declaration that his conviction was for a crime excluded from the Gun Control Act of 1968.{{cite web |last1=Eger |first1=Chris |title=Convicted securities fraud exec files suit over gun rights |url=https://www.guns.com/news/2017/08/16/convicted-securities-fraud-exec-files-suit-over-gun-rights |website=Guns.com |accessdate=February 21, 2019 |date=August 16, 2017}}Reyes v. Sessions, no. 17-01643 (D.C.D.C. 2017). In 2018, U.S. District Court Judge John D. Bates ruled in favor of Reyes.

On January 20, 2021, Greg Reyes was granted a full pardon by President Trump.{{cite web |url=https://www.nbcnews.com/politics/donald-trump/full-list-trump-s-last-minute-pardons-commuted-sentences-n1254806 |title= Full list of Trump's last-minute pardons and commuted sentences |date= January 20, 2021 |website= www.nbcnews.com|access-date=2021-01-21}} {{cquote|President Trump granted a full pardon to Greg Reyes. This pardon is supported by Shon Hopwood, former United States Attorney Brett Tolman, and numerous others. Mr. Reyes was the former CEO of Brocade Communications. Mr. Reyes was convicted of securities fraud. The Ninth Circuit Court of Appeals, however, threw out his convictions, finding prosecutorial misconduct. He was later retried, convicted, and sentenced to 18 months in Federal prison. Mr. Reyes has accepted full responsibility for his actions and has been out of prison for more than 8 years.}} When asked how he secured the pardon in an interview on Clubhouse on March 1, 2021 in the club "A16Z BIO", Reyes said he had reached out to several people that he believed may have been able to help him get a pardon. These included un-named friends of friends that played golf with President Trump, Shon Hopwood, Brett Tolman, David Horowitz and Fox News anchor Maria Bartiromo, who was in regular contact with President Trump. Mr. Reyes didn't say or seem to know which approach worked, but ultimately he did receive the pardon.{{Cite web|last=Reys|first=Greg|date=March 1, 2021|title=Greg Reyes — Unfettered Conversation with A & Z|url=https://www.youtube.com/watch?v=kigObOYUCbw|access-date=March 2, 2021|website=YouTube}}

{{reflist}}

• [http://www.ca9.uscourts.gov/datastore/opinions/2009/08/18/08-10047.pdf United States v. Reyes], no. 08-10047 (9th Cir. Aug. 18, 2009); Ninth Circuit opinion reversing Reyes's conviction on the ground of prosecutorial misconduct
• [http://www.brocade.com Brocade]
• [https://www.justice.gov/ U.S. Department of Justice]
• [https://www.sec.gov/ U.S. Securities and Exchange Commission]
• [http://www.realtimecourtstatus.com/ Realtime updates from the Gregory Reyes trial] {{Webarchive|url=https://web.archive.org/web/20100302212111/http://www.realtimecourtstatus.com/ |date=2010-03-02 }}
• [https://web.archive.org/web/20110318082012/http://www.gregoryreyes.net/ "Greg Reyes at archive.org"]

{{DEFAULTSORT:Reyes, Gregory}}

Category:1962 births

Category:Living people

Category:American businesspeople convicted of crimes

Category:American computer businesspeople

Category:American white-collar criminals

Category:People pardoned by Donald Trump