The Real Backdating Scandal

As I wrote yesterday, the Broadcom backdating prosecution has been dismissed because the prosecutor had made the case what the judge called a “mockery of justice.” A key problem was the prosecutor’s intimidating defence witnesses from testifying.

In August, Greg Reyes’ backdating prosecution – the key conviction that ultimately triggered the Broadcom prosecution – was reversed on appeal. As I discussed then, the prosecutor ‘culpably’ misrepresented the state of the evidence concerning what Brocade’s finance department knew about the backdating, which was critical to whether Reyes’ state of mind.

Holman Jenkins writes in today’s WSJ that he suspects the Broadcom court was willing to condemn the prosecutorial behaviour “because it was in the service of a prosecution that fundamentally never deserved to be brought. . . .[M]ost backdating cases amount to companies trying to behave rationally amid irrational accounting rules, rather than the media’s standard trope of businessmen a-lyin’ and a-stealin’.”

Read the rest of the story here.

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