Executive Charged With Securities Fraud

The former chief financial officer of Brocade Communications Systems, Inc. was charged with eight counts of civil securities fraud for allegedly ignoring that the company was improperly accounting for backdated stock option awards. The Securities and Exchange Commission alleged that Michael Byrd, age 45, who served as Brocade's CFO from 1999 to 2001, knew the company should have been incurring compensation expenses for certain option grants to workers but failed to incorporate those charges into the financial reports released to investors. The SEC sued Byrd in U.S. District Court in San Francisco. He is accused of violating various securities laws and defrauding investors by approving faulty financial statements.