Brocade backdating scandal
A series of academic studies was responsible for bringing the backdating scandal to light.The first was in 1995, when a professor at New York University reviewed option-grant data that the SEC forced companies to publish.(See also: In the early 2000s, new accounting provisions were enacted that required companies to report their option grants within two days of their issue and also required that all stock options be listed as expenses.These changes reduced the likelihood of future backdating incidents.Originally known for its Fibre Channel storage networks, the company expanded include a wide range of products marketed as third platform technologies.Offerings included routers and network switches for data center, campus and carrier environments, IP and Fibre Channel storage network fabrics; Network Functions Virtualization (NFV) and software-defined networking (SDN) markets such as a commercial edition of the Open Daylight Project controller; and network management software that spans physical and virtual devices.
The roots of the scandal date back to 1972, when an accounting rule was put in place permitting companies to avoid recording executive compensation as an expense on their income statements so long as the income was in the form of stock options that were granted at a rate equal to the market price on the day of the grant, often referred to as an at-the-money grant.
On November 2, 2016, Singapore-based chip maker Broadcom Limited announced it was buying Brocade for about .5 billion.
Brocade was founded in August 1995, by Seth Neiman (a venture capitalist, a former executive from Sun Microsystems and a professional auto racer), Kumar Malavalli (a co-author of the Fibre Channel specification) and Paul R.
A business run without integrity is a scary proposition.
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