Brocade Backdating Suit Not Expected to Name Wilson Sonsini
Wilson Sonsini Goodrich & Rosati is not expected to be named in a civil lawsuit filed by a committee for Brocade Communications Systems Inc. that seeks damages against those responsible for improper backdating.
Sources told the Daily Journal (sub. req.) that neither the firm nor its name partner Larry Sonsini is expected to be named as a defendant, although the final list of defendants is still being drawn up.
Sonsini was a Brocade director when the company granted backdated stock options and his law firm was outside counsel to the company.
Possible targets of the suit by the special Brocade committee are former CEO Gregory Reyes and former human resources chief Stephanie Jensen, who were both convicted last year of backdating-related crimes.
Ralph Ferrara of Dewey & LeBoeuf is lead counsel of the Brocade special committee preparing the lawsuit. He said in court filings that he plans to file civil claims under the Racketeer Influenced and Corrupt Organizations Act against a small number of individuals.
The special committee’s lawsuit could trump a separate derivative suit filed this spring that named Sonsini and the law firm. The suit had alleged the law firm committed legal malpractice by approving backdated stock options and giving bad settlement advice in another derivative case. The settlement would have released all defendants from liability for backdating except for Reyes.
