SAN FRANCISCO (AP) - A federal appeals court on Friday tossed out the securities fraud conviction of the former chief financial officer at McAfee Inc.
The 9th U.S. Circuit Court of Appeals in San Francisco on Friday said federal prosecutors had failed to show Prabhat Goyal did anything illegal in the way he accounted for millions of dollars in revenue and in his dealings with customers.
Goyal was named CFO in late 1997 when Santa Clara-based McAfee was still known as Network Associates. He resigned in early 2001. He was indicted three years later on charges of illegally misstating revenue and lying to auditors.
A jury convicted him in 2007 and he was sentenced to a year and a day in prison. Goyal was allowed to remain free while his appeal was pending.
The appeals court overturned a conviction that was largely based on interpreting complicated accounting rules.
Prosecutors alleged that Goyal covered up $330 million in losses at the security software company with illegal accounting procedures that fell outside of industry guidelines.
Prosecutors presented no evidence that Goyal's action were illegal, said Judge Richard Clifton, writing for the unanimous panel.
"Even viewing the evidence in the light most favorable to the prosecution, no reasonable juror could have found Goyal guilty beyond a reasonable doubt of any of the charges against him," Clifton wrote.
Chief Judge Alex Kozinski wrote a concurring opinion criticizing federal prosecutors for pursuing the case.
"This is just one of a string of recent cases in which courts have found that federal prosecutors overreached by trying to stretch criminal law beyond its proper bounds," Kozinski said.
Jack Gillund, a spokesman for the U.S. Attorney's office in San Francisco, said prosecutors are reviewing the decision to determine whether to appeal.
McAfee is being bought by microprocessor maker Intel Corp. The $7.68 billion deal announced in August is the biggest acquisition in Intel's history.