Is Gregory Reyes, the former C.E.O. of Brocade Communications, guilty of defrauding shareholders for his role in backdating stock options?

The world may never know, as the judge overseeing his case is now considering dismissing it for lack of evidence. The case is the first to bring criminal charges for actions related to backdating options, and its outcome could have an impact on future prosecutions.

Nearly 200 companies have been investigated for backdating, which is the practice of pricing options on dates when the stock price was lower than the day the grant was made. The recipient of the option would thereby receive more compensation because of the lower strike price.

Last week, Reyes' defense team filed a motion to dismiss his case based on a lack of evidence showing that he intentionally defrauded Brocade's shareholders. Instead, the prosecution claimed, the backdating was done to recruit employees, which would benefit shareholders.

The judge asked prosecutors to file a response to the defense's motion. In it, they said that Reyes routinely falsified documents to cover up the options-pricing scheme. The company ended up avoiding compensation expenses that it should have recorded, the government alleges.

The judge has not yet ruled on the defense's motion and has given no indication when he will. The arguments in the trial, which began on June 18, will proceed while the motion is under advisement, the Wall Street Journal reports.