Attorney's Resignation Roils California Stock-Options ProbeAttorney's Resignation Roils California Stock-Options Probe

SAN FRANCISCO — The abrupt resignation earlier this week of Kevin Ryan, the U.S. Attorney based here, has left several questions unanswered, including the fate of the task force Ryan established last year to investigate historical stock options granting practices at Northern California companies.

Ryan announced his resignation Tuesday (Jan. 16), saying in an email to colleagues that he had been considering "for some months now" pursuing other career opportunities for "a variety of personal and professional reasons."

A spokesperson for the U.S. Attorney's Office here did not respond to a question about what Ryan's resignation might mean to the task force, but said via email that Ryan has not announced when his resignation will take effect and that an interim replacement has not yet been named.

As to the effect of Ryan's departure on ongoing cases, including those against former Brocade Communications Systems Inc. executives charged last year with securities fraud and other counts, the spokesperson said, "The U.S. Attorney has established an infrastructure with institutional knowledge that should allow for the office's cases to continue moving forward."

Presumably, the fate of the Bay Area backdating task force, established by Ryan in July 2006, will be left in the hands of his successor. The successor would also presumably make the call about any investigations currently underway.

Ryan had in previously declined to specify the number of companies his office was investigating for alleged stock options grant manipulation. But several companies have acknowledged in regulatory filings and news releases that they have received subpoenas from Ryan's office. An interview with Ryan published by the San Francisco Chronicle last month said Ryan's office was investigating more than 25 companies and quoted him as saying that 15 to 20 percent of those had troubling red flags.

The U.S. Securities and Exchange Commission has acknowledged the investigation of more than 100 companies for alleged stock options backdating.