By Julia Cheever
March 13, 2008
Prosecutors have asked a federal judge in San Francisco to send a former Silicon Valley executive to prison for at least six months and fine her $5.25 million for her role in a stock options backdating case.
Stephanie Jensen, 50, of Los Altos, a former vice president in charge of human resources for San Jose-based Brocade Communications Systems Inc., is due to be sentenced by U.S. District Judge Charles Breyer on March 19.
She was convicted in December of one count of conspiracy to falsify company books and records and one count of falsifying books.
Jensen’s case was the second in the nation to go to a federal jury trial in a nationwide probe of the corporate practice of backdating stock options so that employees can buy company stock at a better price.
The first to go to trial was the case of Jensen’s former boss, former Brocade Chief Executive Officer Gregory Reyes. Reyes was convicted in a separate trial of 10 counts including securities fraud.
He was sentenced by Breyer in January to a year and nine months in prison and fined $15 million. He was allowed to remain free while he appeals.
Prosecutors argued in a court filing late Wednesday that Jensen abused her position of trust at the data storage networking company and that she engaged “in a four-year scheme to hide what she was doing and then to lie about it to gain a competitive advantage.”
But defense attorneys on Wednesday submitted papers asking Breyer to sentence Jensen to probation or home detention and to limit the fine to $500,000.
Defense attorneys said Jensen “deeply regrets what happened at Brocade,” but said her actions were the result of inexperience and trust in others rather than a criminal mindset.
Backdating itself is not illegal, but it is illegal to fail to record the practice as a compensation expense in company books. Several other defendants have pleaded guilty to backdating related charges in other courts around the nation .
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