SEC sees three-year window for Riverstone trial
The Securities and Exchange Commission estimates it will take 15 days to try six former executives of Riverstone Networks on charges of securities fraud, and it will need nearly three years to prepare for that trial – if it ever gets to trial.
The estimates came in a case plan filed by the SEC with U.S. District Court in Northern California, where Riverstone moved after it spun off from Rochester-based Cabletron Systems in 2001.
The Riverstone executives are charged with inflating revenue at the time of the spinoff, charges that echo similar charges the agency filed in New Hampshire against former executives of another Cabletron spinoff, Enterasys Networks.
A federal jury in New Hampshire convicted four of the Enterasys defendants in December on criminal securities fraud. The four face sentencing next month. Jurors could not reach a verdict on the fifth defendant. He is scheduled to be retried in November in Concord.
In California, the Riverstone defendants have all filed for dismissal of the charges, and a hearing on the matter is scheduled for March 14.
If the charges aren’t thrown out, it would take two weeks for defense attorneys to download all of the electronic documents involved, which includes 1.1 million scanned images. That doesn’t even include some 90 boxes of documents, two-thirds of which come from Riverstone’s two auditors.
The SEC estimated that it would take more than two years to go through the documents and take some 30 depositions, and another five months to prepare for a trial in November 2009.
The SEC investigation has plagued Riverstone. The agency revoked the company’s license after it filed for bankruptcy in February 2006. Its assets were sold off in May to Lucent Technologies, but its bankrupt shell is still holding off paying shareholders in full until it is determined how much it should set aside to defend former executives, who say that they also are subjects of criminal investigation. – BOB SANDERS