Brocade subject to government probe

Data storage equipment maker Brocade Communications Systems said it overstated earnings between 2001 and 2004 by as much as US$52 million due to stock option expenses.The company admitted it was the target of a government probe, according to a Reuters report.

Data storage equipment maker Brocade Communications Systems said it overstated earnings between 2001 and 2004 by as much as US$52 million due to stock option expenses.

The company admitted it was the target of a government probe, according to a Reuters report. It's cooperating with a joint investigation of its stock option practice by the US Justice Department and the Securities and Exchange Commission.

"We are cooperating fully with the SEC and DOJ and hope that the investigation can be concluded as quickly as possible," the report quoted Brocade chief executive Michael Klayko as saying.

"The Board and management team are absolutely committed to the highest standard of accounting and continuously improving our internal controls and compliance with our policies," Klayko added.