Gregory Reyes

Gregory Reyes (born September 1, 1962) is an American businessman who was the chief executive officer (CEO) for Brocade Communications. He is the first person to have been convicted for fraudulent backdating of corporate stock options.

Education and business career 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 was president and CEO until Wireless Access was bought out in 1997 by Glenayre Technologies.

In 1998, Reyes became the CEO of Brocade Communications, where he led the company to its initial public offering in 1999. 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 2002 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,

Stock option backdating issue Charges In June 2005, Brocade announced that the U.S. Securities and Exchange Commission had undertaken an investigation into the company stock option accounting. In August 2006, the U.S. government indicted Reyes on 12 counts of securities fraud, two of which were later dropped.

On August 11, 2007 Reyes was convicted on 10 counts of illegally backdating stock options while CEO of Brocade. In January 2008, he was sentenced to 21 months in prison and received a $15 million fine. 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.

Appeal 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. that request was denied November 6. In December 2009, Northern California legal newspaper The Recorder reported that prosecutors had reached a decision to retry Reyes.

In the appeal, the National Association of Criminal Defense Lawyers had supported Reyes with an amicus brief urging reversal. Reyes was represented in the appeal by former U.S. Solicitor General Seth Waxman.

Second trial and appeal 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. Reyes was incarcerated at the Taft Correctional Institution in Taft, California; he was released on December 29, 2011. The court affirmed the conviction October 13. On February 10, 2012, Reyes petitioned the U.S. Supreme Court for a writ of certiorari, asking the court to review the case. The petition was denied the following month.

Civil proceedings In addition to the criminal proceeding, Reyes has also been named in several civil lawsuits in state and federal courts, 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. 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.

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. In 2017, Reyes sued for a declaration that his conviction was for a crime excluded from the Gun Control Act of 1968. In 2018, U.S. District Court Judge John D. Bates ruled in favor of Reyes. 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. Reyes didn't say or seem to know which approach worked, but ultimately he did receive the pardon.