Brocade CEO’s Fate In Jury’s Hands.

The first criminal trial involving stock-option backdating is about to come to a close.  A jury will soon determine the fate of former Brocade Communications Systems Chief Executive Greg Reyes.The 44-year-old former CEO is accused of misleading investors by backdating hundreds of grants and altering documents to hide the practice from regulators and auditors. The case is the first test of whether a jury will consider backdating illegal. Deliberations began on Monday after U.S. District Court Judge Charles Breyer instructed the jury about the 10 counts of conspiracy, securities fraud and other charges against Reyes.

The judge instructed the jurors to consider the impact of Reyes’s conduct on investors and whether “a reasonable investor would consider it significant” in deciding “whether to buy, sell or hold” Brocade’s shares.

Judge Breyer refused to rule on a request by Reyes’ attorneys to dismiss the case, calling it “premature.” Richard Marmaro, Reyes’ lawyer, said U.S. prosecutors lied when they told the jury that Brocade’s finance chief was deceived by Reyes because the finance chief knew about the backdating.

Breyer said he may consider the dismissal request if the jury convicts Reyes. He instructed jurors that some comments by attorneys for both sides “may have been in error” and they should review the evidence to decide how much weight to give the comments.

Reyes faces up to 20 years in prison if convicted of the most serious charges.