Citing misconduct by prosecutors, a three-judge panel of the United States Court of Appeals for the Ninth Circuit in San Francisco ordered a new trial for Reyes, who had been convicted of 10 charges of conspiracy, fraud, making false regulator filings and falsifying records for backdating hundreds of employee stock options.

A favorable turn of luck for Reyes, who had been sentenced to 21 months in prison and ordered to pay a $15 million fine for misdeeds that, according to that three-judge panel, had been grossly exaggerated and perhaps even fabricated.

“Deliberate false statements by those privileged to represent the United States harm the trial process and the integrity of our prosecutorial system,” Judge Mary Schroeder wrote in the 3-0 ruling. “We do not lightly tolerate a prosecutor asserting as a fact to the jury something known to be untrue or, at the very least, that the prosecution had very strong reason to doubt.”

The panel stopped short of throwing the case out entirely, noting that “there was no question that Reyes signed off on stock-option grants that were priced retrospectively and that the backdating allowed Brocade to understate its compensation expenses.” So the United States attorney could opt to retry the case, though that seems a bleak option at this point given the tenor of the ruling.

“This is the highest profile [backdating] case they had that went to trial, so I’d expect they will try it again, if for no other reason than for reputational purposes,” Wayne State University law professor Peter Henning told the Mercury News. “But talk about a case that’s stale.”

Searing claims. Unfortunately for Save Sirius and its founder Michael Hartleib, they’re far too lacking in specificity for a court to take them seriously. “The majority of Mr. Hartleib’s arguments to show the futility of making a demand on the current Sirius board are based on generalized, not specific allegations,” Judge Cormac J. Carney wrote in an order dismissing the suit. “Although the complaint identifies alleged fraud and wrongdoing committed by Defendants, it does not state how each specific Sirius director was responsible for those actions.”

Hartleib, for his part, was unfazed by the dismissal. “The case is not over at all,” he said. “We have twenty days to resubmit, and we shall.”

As of this writing SIRI was trading at $.15, about double its 52-week low.

The collectibles retailer claims it paid Yahoo’s Search Marketing unit, formerly known as Overture Services, some $936,000 between 2002 and 2006 for click-throughs. It assumed these click-throughs were from legitimate customers, but it turned out they were generated by Yahoo/Overture affiliates who received commissions based on the number of clicks their sites generated for advertisers.

“These clicks were not actual traffic, but were fraudulent clicks,” BigReds claims in the suit. “Affiliates of Overture used software programs, employed people, and/or directed people other than actual customers to click on plaintiffs’ links from keyword search results.”

To be fair, Yahoo did offer BigReds a refund for the fraudulent clicks. It just wasn’t as large as the retailer had hoped–$17,082.80.

We managed the existing book very well because we decided some time before the crisis to be long volatility and be less sensitive to correlation, so the losses were minimal. We suffered on our statistical arbitrage trading activity, but that was just for one month, and minimal compared to some hedge funds or other banks. Overall, our trading activities will be approximately flat compared to last year, which is a good performance.”

–Christophe Mianné, Société Générale’s head of market activities, Jan. 2007

How ironic is it that Société Générale, the French bank responsible for the biggest fraud in investment banking history, was just this month named Equity Derivatives House of the Year by the financial risk-management magazine Risk? Yesterday, Société Générale, one of the pillars of European finance, revealed that a junior trader, identified as Jérôme Kerviel, had made massive bets in the futures market and cost it more than $7 billion.

How could it happen that a lone rogue employee could lose what essentially amounts to a year’s worth of profits without it being noticed, especially one that human resources officials at SocGen described as a “fragile individual without particular genius”? The bank says that each time Kerviel took a position one way, he would enter a fictitious trade in the opposite direction to mask the real one. Essentially, he created a secret second firm within the bank’s market rooms.

“He succeeded in building this hidden firm, in building his positions by hiding them by other positions that were totally fictional,” Société Générale CEO Daniel Bouton told reporters at a Paris news conference yesterday. “That is what is so extraordinary about this case.”

Indeed. Though not quite as extraordinary as how he managed to do it without detection. Said one bond trading firm CEO, “One hundred thousand euros! He was earning 100 grand and was allowed to take a 4.9 billion euro position? I don’t believe it.”

Believe it. Certainly the 415 of members of the “Jerome Kerviel should be awarded the Nobel Prize in Economics” Facebook group do.