Now that the Justice Department got its first backdating scalp in Brocade Communications System's former CEO Gregory Reyes, the Securities and Exchange Commission has now targeted company's former chief financial officer, Michael J Byrd, claiming he was well aware of the falsification of the documents.
But his lawyer has told CFO.com that the court had already rejected Reyes' claims that Byrd was aware of the shenanigans.
In her blog, Re The Auditors, Francine McKenna looks at the question of whether the gatekeepers, including the auditors KPMG, were at all culpable but makes the point that KPMG "put their finger on the issues and stood hard and fast when they did". Indeed, it was their investigation that resulted in Reyes' resignation.
Still, by targeting Byrd the SEC has made it clear that none of the gatekeepers should rest easy. And with more prosecutions coming up, that should be a worry for auditors and CFOs.
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