Greg Reyes, And The Red Sox.....

Greg Reyes, former CEO of Brocade, was convicted of 10 counts of fraud involving backdating stock options.  The practice, in case you are unaware, is when executives knowingly issue stock options in arrears, when a stock price was lower, to create instant value and wealth.

The practice, unfortunately, was widespread and far reaching.  Reyes is appealing, and continues to tout his innocence.  The Justice Department clearly went after him with all it's weapons, as an example and poster child for how this corporate badness just won't be tolerated.

In everything I've read, Reyes didn't really profit personally from the act - he was already loaded.

So, this chapter continues, but it does hopefully show the next generation that they will either have to resign themselves to doing things the right way, or find new ways to cheat.  I like Greg personally.  He is a tall, rich, charismatic person who embodied the "go go days" of the storage market.  He came from money, made his own on top, and now is facing 20 years in jail. 

Which gets me to the Red Sox.   You skate through some times, when everything is smooth sailing and you can do no wrong.  Brocade and Greg did that thru the gold rush.  The Sox were up 12.5 games a month ago - and goofy fans said "it's all over!"  Party on.  The problem is, if it's too good to last - it won't.  Now the stinkin Yankees are 5 games out, and I'm losing sleep. 

You can't skate in this world - you gotta put in the effort even when you are winning.  How many companies lost the magic they had because they got cocky or arrogant and figured it would never end?  We act like it becomes our "right" to succeed.

Here's 43 years of chemically depleted knowledge for you:   Don't cheat.  Don't lie.  Never, ever think that anyone owes you your rightful place in life - you gotta earn it every day.  The worst is when you truly believe that you know better, or are above the law, or that since you are smarter and better looking, that little things like rules and morals don't apply to you.  Those are the people to stay away from. Those are the companies to run from.

The Sox better start playing the game the old fashioned way again, and get their heads out of the clouds, because I can't take another riches to rags NY ending.

Comments

[Natalie]

Well said Steve. Yet another morning spent shaking my head reading the WSJ.

---Good thing the Journal doesn't have a sports page, Barry should be in jail for all he's done to society. Hank still king in my book.....Steve.

[TM]

The problem with Reyes (and I suppose this applies to Barry Bonds, Martha Stewart, etc.) is that he's a scapegoat. As Steve rightly notes, the practice is widespread. Doesn't make it right, of course, - but on the other hand, hardly fair to damn a few individuals for the crimes of the masses. But I guess that's how it works, eh? A good old-fashioned public execution is the best deterrent?

As for Mr. Bonds, of whom I am not a fan (at all), permit me to play the Devil's advocate for just one minute :). The thing is: Batters aren't the only ones on the juice. In fact, I read recently that more pitchers have been caught cheating than batters. So, it seems to me that a juiced-up pitcher throwing a 98 mph heater in the 9th inning is (a) extremely hard to hit and (b) something Hank Aaron didn't see very often. Did Bonds cheat? Are performance enhancing drugs horrible? Yes, yes – a thousand times yes. So, find him guilty or give him his due.

And as for the Sox and those “stinkin Yankees”, man – I hope next year brings us an Orioles team that could beat its way out of a wet paper bag :). The great people of Baltimore deserve better than this….

----Don't get me wrong - I couldn't hit a ball that far with a Steroid Drip and angel dust induced anger! And yes, of course you are correct that Hank probably didn't face the raw talent or the doped up pitchers either, and that Reyes isn't alone. That said, it doesn't make it right, and so everyone they catch in the options thing should have the same fate - and everyone who taints the game that has been played for generations by the youth of the world should be exposed for the frauds they are. It helps that Barry is a jackass and jerk, it makes him easier to hate. It probably helped the U.S. Government that Reyes was so arrogant and adamant - and i'm guessing the Jury saw it the same way (ten times). I am not saying we should fry everyone who makes an honest mistake, or a lapse in judgement - but those who try to beat the system for the sake of being "bigger" than it, can all enjoy life in Oz. I don't want my kids to think that cheating is ok if you don't get caught. I know it's systemic of society - these problems we are discussing - but at the end of the day it's still about individuals and right vs. wrong.

I remember being at a bar while in one of my many years at Babson College - and a guy standing there said "Ethics - it's all about ethics, they should force that in school" - this was about 1984 or so - and my reply, of course, was "F*&# ethics". The times were all about "greed is good", and so I was caught up in the times. Ethics were lame. Years later, after observing the effects of "F ethics" first hand, I got to make a conscious decision of either doing things right or doing them wrong. Thankfully, my Waterville, ME bred father raised me correctly, and eventually I took what I think was the right path. I kick myself in the butt all the time for what might have been, but I go to sleep each night knowing that whatever I have, I earned. I won't get into the hall of fame, and won't impress Giselle with my bankroll, but I'm ok with that. Of course, this could be total rationalization on my part..... - Steve

[TM]

Square nail hit on head, mate.

[Rod]

I just want to add a couple of thoughts to your analogy.

Just like Bonds, the rule book never said you couldn't back date until SarBox. In the Reyes case the 'tech valley commissioner' (Sosoni) had written an opinion which left the door open, and all of the statisticians (KPMG, $9M over 4 years) blessed the tally.

The worst thing your analogy brings up, is the current sentiment in the USofA "We act like it becomes our "right" to succeed".

Well it used to be our RIGHT to succeed in this country.