Updating Backdating

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The story of SEC plans to launch the first options timing case continues to bend and wind. Yesterday CNBC’s Charlie Gasparino was the first to have the story that the SEC was said to be ready to launch its first backdating case in the form of a civil suit against Brocade Communications, or possibly its former CEO Gregory Reyes, according to various lawyers familiar with the case. Later in the day, the Dow Jones wire ran with the story that SEC commissioner Chris Cox had said SEC would have an announcement "very soon" about civil charges, although Cox declined to name a company or provide a more specific date. This seemed to confirm the notion that a civil case was on its way but probably not a criminal case. (Gasparino's piece, however, left open the possibility of criminal charges coming down as well-, noting that Reyes' attorneys had met with federal prosecutors but were "cautiously optimisic" that their client wouldn't face criminal charges.)
Now the Wall Street Journal is reporting it both ways. According to some Journal source, “federal prosecutors have warned the former chief executive of Brocade Communications Systems Inc. that he could face criminal charges related to stock options timing practices at the storage-networking firm, according to a person familiar with the situation. According to others, however, the SEC “is expected to file civil charges in the Brocade matter but wouldn't say whether it was against the firm or individuals.”
So we can thank the Wall Street Journal for clearing that up for us.

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