Two Backdating Defendants Seek Notes From Law Firms’ Internal Probes
Former McAfee Inc. general counsel Kent Roberts claims notes of an internal investigation will show that other executives were behind backdating of stock options at the company.
Roberts’ lawyer, William Freeman, will ask a San Francisco federal judge on Monday to order the law firm that conducted the investigation, Howrey, to give him the notes, the Recorder reports. He is making the request in a civil fraud prosecution by the Securities and Exchange Commission.
“Among other things, this information may well demonstrate that McAfee, through its finance and human resources departments and through its board of directors, frequently modified and repriced option grants,” Freeman wrote in his motion to compel, filed with U.S. District Judge Marilyn Hall Patel.
Roberts’ motion comes on the heels of a similar request by Kenneth Schroeder, the former CEO of KLA-Tencor Corp., who is also accused of backdating in an SEC lawsuit, the Recorder story says. His lawyers unsuccessfully tried to depose KLA lawyers about the corporate probe and are now seeking to get the SEC suit dismissed on due process grounds.
At issue is whether the documents sought are protected by the attorney-client privilege. Bolstering the executives’ quest for the documents are two recent rulings.
In Roberts’ case, Freeman cites a ruling by U.S. District Judge Charles Breyer in the trial of Brocade Communications ex-CEO Gregory Reyes. Breyer ruled that Brocade had waived its privilege when it shared information with the government. Prosecutors in Roberts’ case say Breyer’s ruling was made in a criminal case, and it should not apply in the SEC’s lawsuit against Roberts.
In another case, a Delaware chancery court ordered Maxim Integrated Products to turn over lawyers’ notes to plaintiffs lawyers.
