A federal judge has denied a bid by Greg Reyes, the former CEO of storage switch maker Brocade, to launch an appeal against his conviction for stock options fiddling.
Reyes' legal team had high hopes for the challenge because they claim a key prosecution witness has recanted her testimony. The lawyers said that Brocade's former stock administrator Elizabeth Moore now claims she lied on the stand in the original trial, under pressure from prosecutors and in fear of losing her current job, according to AP.
She has refused to testify again unless granted immunity from perjury prosecution.
Northern California US District Court judge Charles Breyer was unimpressed by the U-turn yesterday, ruling that it would be unlikely to change the verdict on Reyes. "What's new is she feels badly for testifying in a certain way. That's not new evidence," the judge said.
Reyes was the first Silicon Valley bigwig to be indicted in a SEC probe into endemic stock options fraud that embroiled dozens of firms. Investigations have centred on how stock option backdating - not illegal itself at the time - was illegally hidden from investors and regulators.
The Reyes trial found that Brocade's option chicanery was obscured with criminal intent. Former human resources chief Stephanie Jensen was also found guilty of involvement in the scam.
Wednesday's decision means that Reyes' convictions of August 7 stand, and he remains scheduled for sentencing on January 16. Jail time of up to 20 years is possible.
Brocade itself has deflected SEC ire by coughing a fine of $7m. ®