* Ordered to pay $15 million fine
* Similar to sentence in earlier case that was overturned
By Alex Dobuzinskis
LOS ANGELES, June 24 A U.S. judge sentenced the
former chief executive of Brocade Communications Systems Inc
(BRCD.O) to 18 months in prison on Thursday for securities
fraud, and ordered him to pay a $15 million fine, said
Jack Gillund, a spokesman for the U.S. Attorney's Office.
Gregory Reyes was found guilty in March of securities
fraud, after becoming one of the highest profile executives to
be accused of illegal stock options backdating.
The sentence that U.S. District Judge Charles R. Breyer
imposed on Reyes in San Francisco on Thursday was similar to
one handed down in the former executive's first trial in 2007.
That conviction was overturned by the U.S. Court of Appeals
for the Ninth Circuit, over prosecutorial misconduct.
The appeals court ruled that prosecutors made a false assertion
of material fact to the jury during closing arguments.
But U.S. prosecutors re-tried Reyes, resulting in a
conviction and a win for the government, which has struggled to
secure convictions in backdating cases.
Backdating is the practice of retroactively pricing option
grants on days a company's stock price was low, to lock in
financial gains. The practice in effect increases the value of
the options, but is not illegal if properly accounted for.
Prosecutors said that Reyes engaged in illegal backdating
to reward insiders and mislead investors, and to pad his own
pocket from the scheme.
Reyes had originally been given a 21-month prison term and
a fine of $15 million.
The backdating of stock option grants became a major issue
in 2007, with more than 170 companies either investigated by
U.S. authorities or conducting internal inquiries into possible
manipulation of stock-option grant dates.
(Reporting by Alex Dobuzinskis; editing by Carol Bishopric)