Monday, November 9, 2009

Deliberate Prosecutorial Misconduct in Northern California

Greg Reyes, former CEO of Silicon Valley's Brocade, was targeted and convicted by members of the Rove Republican Racket in 2007 for stock-option backdating.

Reyes (pictured) appealed the ten count verdict due to prosecutorial misconduct. This summer the appeals court threw out the convictions due to deliberate prosecutorial misconduct.

Then the federal government tried to get the court to strike the word "deliberate."

What happened next? From last week's Legal Pad of Cal Law:

Federal prosecutors just got their second punch in the gut over the Greg Reyes backdating case: the Ninth Circuit has explicitly refused to back away from a finding that the government committed deliberate misconduct during trial.

Reyes’ securities fraud convictions had been the Northern District [of California]’s highest-profile success in the war against stock-option backdating, because Reyes had been CEO of [Silicon] Valley darling Brocade. But over the summer an appellate panel threw out those verdicts, finding that AUSAs Tim Crudo and Adam Reeves misled the jury by stating that Brocade finance department didn’t know anything about backdating at the company. In fact, it did.

In the aftermath of that opinion, the government didn’t ask that the court reinstate the convictions. Rather, it just asked that it eliminate any judgment that Reeves and Crudo acted deliberately. This is a big deal in Justice Department-land: a deliberate misconduct finding triggers an investigation from DOJ’s Office of Professional Responsibility, which falls somewhere between root canal and colonoscopy on a federal prosecutor’s list of preferred procedures.

[On Friday] the court issued an amended order, but it only made a factual change; it didn’t strike the word deliberate. A U.S. attorney spokesman didn’t immediately respond to an email, nor did Crudo, who has since returned to a Latham & Watkins partnership.