Read The Recorder‘s roundup of the stock-option backdating scandal. There won’t be a test later … but there might be a subpoena.
If the court wanted, Brocade and Wilson Sonsini would be willing to remove the section of the proposed settlement that bars Brocade from suing Wilson Sonsini for any reason relating to backdating, Locker wrote.
But Breyer was still uneasy.
“I think you ought to really be concerned whether to continue with this representation,” he told her. “Allegations can be made without substance or merit � but when those allegations are made, I would step aside.”
The judge continued: “I don’t want to suggest you or your firm were engaged in any inappropriate conduct. I do want you to give some thought over whether it’s appropriate [to represent any party in this action].”
Breyer put the matter over to Aug. 24. Locker declined to comment on the conflict questions outside court.
Wilson Sonsini also represents Brocade and Sonsini in two other civil cases, a securities fraud suit in federal court and another derivative action in Santa Clara County Superior Court.
“As a global enterprise, Brocade employs several law firms to advise on many different regulatory, compliance and legal matters,” said Brocade spokeswoman Leslie Davis. “We expect Wilson Sonsini to remain a trusted legal adviser to Brocade and when appropriate engage separate counsel to advise Brocade or the Board of Directors.”
Jury selection in Reyes’ federal criminal prosecution is scheduled for June. He also faces civil Securities and Exchange Commission charges.
The plaintiff retirement funds are represented by Schiffrin Barroway Topaz & Kessler and other firms.
