News

posted on 25 July 2008 11:28

Brocade has decided not to try and recover losses from its backdating scandal by suing its then law firm, Wilson Sonsini.

Ex-CEO Greg Reyes was involved in backdating executive stock options so that the executives made more money when the options matured. He is now in jail, along with Stephanie Jensen, the ex-Brocade HR head. Brocade paid a $160 million sum to investors in June to end costly legal processes.

Brocade set up a special litigation committee to see if it could recover some or all of this money through legal proceedings against up to eleven, un-named, people.

The company's law firm, when Reyes was operating the backdating scheme, was Wilson Sonsini and a firm member, Larry Sonsini, served on Brocade's board. Larry Sonsini and the Wilson Sonsini firm have been named in a lawsuit by Johnson Bottini, another law firm, which is trying to get Brocade to recover damages and share in the proceeds. That law suit is continuing.

Interestingly Wilson Sonsini was involved in the HP spying-on-reporters pretexting case last year.

More here.

^{[Martin Edwards, news writer.]}