Instead, "the record readily establishes that [Karatz] used Hirst to perpetrate a fraud," according to papers filed by the prosecution.
Karatz's attorney, John Keker of San Francisco's Keker & Van Nest, claims that his client was "erroneously denied" a jury instruction that state Karatz could not have committed fraud in concealing KB's backdating practices if he was relying on an attorney's advice.
Indeed, the government should be expected to select their best case to begin.
What is perhaps surprising is the drawn out decision by Judge Breyer on the defense Rule 29 motion for acquittal, which was keyed to whether Mr.
This is the first government enforcement action – civil or criminal – to go to trial.
That the government prevailed should not be surprising.
At the same time, every company and corporate official involved in the 140 or so investigations the SEC reportedly has underway (as well as those in parallel criminal investigations) must be wondering what this verdict means for them.
Had the government lost, it might have meant a re-evaluation of options backdating cases.
The high-profile case rocked Silicon Valley in the early part of last decade: Reyes was the most prominent local executive to be charged with criminal wrongdoing after authorities began investigating numerous local companies and their options practices.Reyes understood or knew much about the critical accounting issues involved.Equally surprising is the length of time which the jury took to come to a verdict.At the end of the day, all of this suggests that government prosecutors would do well to proceed with a more narrow focus than a win in this case might otherwise indicate.
]Federal prosecutors aren't buying former KB Home CEO Bruce Karatz's claim that he didn't defraud shareholders during the backdating scandal that rocked the company.Karatz, in a motion filed for a new trial, says he was relying in good faith on advice from KB's General Counsel Ben Hirst, who advised him to conceal the backdating practices.