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VeriSign Director Charged with Securities Fraud

Bloomberg is reporting that Gregory Reyes is facing criminal and civil charges in relation to securities fraud. Reuters and the Mercury News also have coverage.

Former Brocade Communications Systems Inc. Chief Executive Officer Gregory Reyes became the first CEO charged in the U.S. probe of the backdating of stock option grants to create lucrative employee pay packages.

Reyes, 43, who was ousted as head of the Silicon Valley maker of computer equipment in January 2005 after an earnings restatement, was charged with securities fraud, according to a criminal complaint filed today in San Francisco federal court. Also charged was ex-human resources vice president Stephanie Jensen for her role in backdating option grants for new hires.—Bloogberg, July 20, 2006

Mr. Reyes is a current director of VeriSign and thus the issues I raised in an earlier CircleID story, regarding the ability of ICANN to terminate the VeriSign .com registry agreement using section 16.C appear to now be closer to reality. This is another reason for the DoC not to approve the new agreement, as it doesn’t have similar termination provisions.

By George Kirikos, President, Leap of Faith Financial Services Inc.

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George Kirikos  –  Aug 2, 2006 11:41 PM

Reuters is reporting that he has now resigned from the VeriSign Board.

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