Greg Reyes, former CEO of Brocade, received a sentence of 18 months and a $15 million dollar fine for his conviction on 10 felony counts related to options backdating. Prosecutors had asked for 37 months and a $137 million dollar fine. Mr. Reyes was emotional at his sentencing:
When Reyes got his opportunity to address Breyer, he stood at the lectern silently for a few seconds, and then broke down sobbing. [His attorney] read his statement for him.
“I am a shell of the man I once was,” he read.
Breyer said he was quite moved by the 400 letters sent in on Reyes’ behalf, as well as the financial and emotional support he extends toward others. Yet a message must be sent to executives that deceiving the public markets is a serious crime, Breyer said.
The judge cited one more reason for a prison term.
“White-collar defendants, unlike most defendants I see in court every day, have choices,” Breyer said, adding that he had just sentenced a man to more time than Reyes because he illegally re-entered the United States to see his 5-year-old son.
In two weeks, Breyer will sentence another man whose drug addiction began when his father shot him up with heroin when he was 11.
“What choices did that young boy have?” Breyer said.
The best CEO of any high tech company?
I met Mr. Reyes a couple of times when both of us wanted Sun to buy FC switches to make Sun’s early FC array more maintainable. I was at Sun at the time. He was an excellent salesman, but some idiot had decreed no FC switches for the storage group.
Storage Newsletter had an odd bit of history as well:
In 2002, we asked Steve Duplessie, well known consultant, to told [sic] us who was the best CEO in the storage industry. His answer: “[The best CEO] would be Greg Reyes of Brocade.””
The 2 critical success factors for salesman are: a capacity for self-delusion – so you can sincerely and honestly tell your prospects how good it is; and a resolutely short term focus, because making this quarter’s numbers is what counts. Don’t hire a salesman to design your products or your strategy.
The StorageMojo take
Given Brocade’s current problem – they’ve been for sale for over 9 months and there are no takers – and his own, Mr. Reyes was no strategist. But Brocade’s IPO timing made fortunes for Mr. Reyes and co-founders Paul Bonderson and Kumar Malavalli. Isn’t that what really counts?
But Mr. Reyes can be forgiven if he feels unfairly singled out. Here we are 2 years after after the big Wall Street meltdown, where the big ibanks were packaging and selling crap and calling it gold, when mortgage companies and rating agencies had gone wild, and who’s gone to jail for that?
At the same time, Maher Arar, a Canadian who was arrested in 2002 by U.S. officials while changing planes in New York on a trip to Montreal and then rendered by US officials to a Syrian jail was denied a hearing by the US Supreme Umpires. According to the findings of fact, Mr. Arar
. . . was in Syria for a year, the first ten months in an underground cell six feet by three, and seven feet high. He was interrogated for twelve days on his arrival in Syria, and in that period was beaten on his palms, hips, and lower back with a two-inch-thick electric cable and with bare hands.
So buck up, Mr. Reyes, things could be worse. In 18 months you will have paid your debt to stockholders and you will still be among the richest 30,000 or so people in the world.
Courteous comments welcome, of course. America is a nation of laws, not of men, unless the men are fighting terrorism.