Charges against Gregory Reyes

By way of background, I joined Goldman, Sachs & Co. in 1983 and helped found the firm's high technology investment banking practice. For over 20 years before I retired I was deeply involved in helping a large number of Silicon Valley companies raise financing and in advising them on mergers and acquisitions. During that period I gained a substantial amount of insight into the way that companies and their officials were thinking and feeling.

Although investment bankers were not involved in the stock option area with companies, it is very clear to me that the accounting for stock options created a great deal of uncertainty on the part of company officials about the allowable specific practices of implementing these programs. The fact that stock options could be accounted for without creating a current expense on the income statement (if handled correctly) undoubtedly led many in the community to ignore correct practices without realizing or feeling that any significant wrongdoing was involved. In most cases, the individuals were trying to help their shareholders and employees and did not recognize the importance of specific practices and dates.

In retrospect it is clear that rigorous adherence to specific rules should have been important. However, I do not feel that most of these violations warrant harsh penalties. I know from conversations with Greg that he has suffered a great deal already. In particular I think that a prison sentence would be a massive overreaction to the mistakes which have been judged to have occurred. I hope that you will take into account the overall climate in which he was operating and that you will show understanding and mercy in imposing only extremely modest penalties. I think this course of action would not only be merciful, but also just given the extenuating circumstances of the environment. Thank you very much for your consideration.




Realtime Court Status

Gregory Reyes