Ruehle, or company co-founder Henry T. Nicholas III, who are
accused of conspiracy and securities fraud.
Nicholas also faces charges that he slipped ecstasy into the
drinks of business associates and had a drug warehouse.
Nicholas and Ruehle have pleaded not guilty and are free on
A total of 21 executives have been brought up on criminal
charges related to stock options backdating.
While a number of those charged have pleaded guilty, only two
have gone to trial - Greg Reyes and Stephanie Jensen, the former
CEO and human resources chief for San Jose-based networking
equipment maker Brocade Communications Systems Inc. They were both
Reyes received the harshest sentences to date: he was sentenced
in January to 21 months in prison and ordered to pay a $15 million
fine. Reyes is appealing the case. Jensen was ordered to serve a
4-month prison term and pay $1.25 million. She is also appealing.
Backdating stock options involves retroactively setting the
exercise price to a low point in the stock's value to boost profits
for an executive or employee when shares are sold.
Backdating is legal when properly accounted for but if companies
fail to properly disclose and account for the move, it can cause
profits to be overstated and taxes to be underpaid.
Ducks' Owner Samueli Facing Prison Time
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