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By keeping the charges off the company’s financial records, prosecutors argued, the executives misled investors about the true profitability of San Jose, Calif.-based Brocade, which makes switches and software used to connect corporate servers and data storage systems.

Reyes’ defense team countered that he didn’t understand the accounting implications of his actions and relied on Brocade’s financial department to properly record the expense.

Some defense witnesses also testified that options-related expenses weren’t even relevant in calculating Brocade’s core profitability and measuring the success of its operations.

Prosecutors countered that the government doesn’t have to prove that Reyes knew which securities laws he was breaking, just that he knew what he was doing was wrong.

Mr. Crudo said Reyes knew Brocade’s financial reports and board meeting records were incorrect but signed them anyway, and also lied to auditors about the company’s options practices.

In May, Brocade and Mercury Interactive LLC, now owned by Hewlett-Packard Co., became the first two companies to pay fines to settle accusations by the Securities and Exchange Commission of civil fraud accompanying backdating. Brocade agreed to pay $7 million and Mercury agreed to pay $28 million.

Reyes and Miss Jensen were also initially charged last summer with two felony counts each of mail fraud, but those charges were later dropped.