Ex-CEO of Brocade gets prison for options backdating

Ex-Brocade (NASDAQ: BRCD) CEO Gregory L. Reyes Jr. has been sentenced to 21 months in prison with a $15 million fine for orchestrating a scheme to backdate stock options at the company, illegitimately shifting wealth from the company's owners to its executives.

Judge Charles R. Breyer of Federal District Court in San Francisco, who sentenced Mr. Reyes, said that his efforts to obstruct justice had led to the stiff penalty: "This offense is about honesty. Every time Gregory Reyes falsified documents, repeatedly, over a three-year period, he was lying. That is the core of the defendant's criminal conduct."

Reyes was the first executive to be tried on criminal charges related to options backdating, and he was convicted onten counts of securities fraud.

According to the New York Times, Reyes cried while speaking to the judge before the sentencing: "I'm sorry," Mr. Reyes said, between sips of water and long pauses to compose himself. "There is much that I regret, and if I could turn back the clock, I would."

Is he really remorseful? He'll remain free without bail until a federal appeals court hears his case. If he's so full of remorse, why doesn't he just go to jail for a few months and skip the appeal?

It's good to see that law enforcement is cracking down on at least a few executives who think public companies should be used as their own personal honey pots. Now we need to see boards of directors hold their executives to higher standards too.