16
January
2007
|
23:53 PM
America/Los_Angeles

1.17.07: US Attorney investigating stock options resigns


Kevin Ryan, the US Attorney for Northern California responsible for prosecutions of tech firms for options backdating, has resigned amid what is widely regarded as a Bush Administration purge of US Attorneys, the San Francisco Chronicle reports.


It's not clear what effect Ryan's departure will have on his office's investigation of Bay Area companies for allegedly concealing their backdating of stock options granted to top executives. Ryan appointed a task force last summer to look into the practice and has obtained two criminal indictments and a flurry of executive resignations.


The Department of Justice has asked for resignations of all but one US Attorney in California and Democrats see the moves as at attempt to replace Attorneys who don't meet the Bush Administration's conservative litmus test. Under the Patriot Act, the Department can appoint "interim" replacements indefinitely.

Sen. Diane Feinstein sees this as a way to bypass Congressional review of the appointees and has introduced a bill to roll back the Patriot Act provision so that appointees can only serve for 120 days. Permanent appointment would be made by a federal judge, as they were before the Patriot Act.

But most observers don't think Ryan has been caught up in the purge.


"I don't see Ryan doing anything that doesn't comport with the ideological line out of Washington,'' said Peter Keane, a Golden Gate University law professor and former dean. He said other prosecutors who reportedly are under pressure to leave have been those who "don't meet the general conservative litmus test.''


So what does this mean for Apple and other lower-profile tech companies under the US Attorney's gaze? It's unlikely that Washington has a problem with prosecuting tech companies: white-collar crime is what US Attorneys are supposed to do. Indeed the problem with Ryan appears to be that he was spending more time on San Francisco gang crime than on corporate crime.

Still with a change at the top, investigations against Silicon Valley will probably tread wate for awhile - at least until a new boss is appointed.