Big Bond for Reyes

2:00 PM -- Brocade Communications Systems Inc. (Nasdaq: BRCD) ex-CEO Greg Reyes was slapped last night with $2 million bail, a sum which, according to media reports, Reyes's lawyers describe as a government publicity stunt.

Publicity stunt or not, setting bail at $2 million underlines the feds' desire to come down hard on alleged stock shenanigans. And Reyes is already setting an example: Last month, he became the nation's first executive to be officially charged with stock options fraud. (See Reyes Charged With Fraud, Brocade: We're Clean, and Wit & Wisdom of Greg Reyes.)

With at least 80 other companies under investigation, prosecutors are clearly sending a message that they are only too happy to play hardball. (See Vendor Options Draw SEC Scrutiny.)

The $2 million seems somewhat less harsh when you consider the sort of lucre Reyes enjoyed at Brocade, prior to being sent packing in January 2005. (See Brocade Switches CEOs, Restates , Ex-CEOs Cash In, and 2005 Top Ten: Executive Payouts.) In 2004 alone, Reyes enjoyed a $344,825 bonus on top of his $500,000 salary. (See 2004 Top Ten: CEO Payouts.)

It now looks as if hotshot lawyers could be taking a sizable chunk of that money, as we get set for what looks like being another engrossing courtroom drama.Speaking of which, a little over a year after former WorldCom CEO Bernie Ebbers was sentenced to 25 years for his role in the $11 billion corporate scandal at the telecom giant, judges in New York finally rejected his appeal last week. (See Ebbers Sentenced: See You in 2030, Ebbers Gives It Up, and Ebbers Is Appealing.) At the time, Ebbers's trial was seen as a benchmark in the government's campaign to stamp out white collar crime, with the case setting the standard for future courtroom battles. (See WorldCom's Sullivan Gets Five Years.)

James Rogers, Senior Editor, Byte and Switch