Brocade Communications Systems Inc

Cisco Systems Inc., the No. 1 maker of equipment that runs the Internet, said Tuesday that it will buy Andiamo Systems Inc. but won't close the deal until 2004, waiting to see if the small start-up can become a top player in the data storage switch business. Cisco said the net price could be as much as $2.5 billion but the final price, based on Andiamo's sales, will not be determined until the deal closes.

Investors pummeled QLogic Corp.'s stock Tuesday for the second day in a row after the Aliso Viejo chip manufacturer unveiled plans to buy a money-losing maker of equipment for data storage networks at a hefty premium price. The stock, which tumbled 25% after the deal was announced Monday, was off an additional 17% Tuesday as traders ignored industry analysts who asserted that the sell-off is an overreaction. The stock lost $12.81 to end the day at $61.94 a share.

Launching a prosecutorial misconduct defense that was effective for Broadcom Corp. executives, former KB Home Chief Executive Bruce Karatz has accused federal prosecutors of manipulating witnesses in his upcoming option-backdating trial. In a motion filed this week in federal court in Los Angeles, Karatz's attorney said two former KB Home employees who once supported Karatz later changed their accounts after meeting with federal prosecutors and FBI agents. The attorney cited the change as an indication of prosecutorial misconduct.

He's hardly a household name, but Larry Sonsini is among the handful of people who can take credit for creating the technology powerhouse that is Silicon Valley. For more than three decades, Sonsini has been the behind-the-scenes attorney guiding such companies as Apple Computer Inc., Netscape Communications Corp., Pixar Animation Studios Inc. and Google Inc. through the thickets of stock offerings and growing pains.

Leaving no corner of the technology sector immune from investor wrath, Wall Street pummeled storage networking companies Monday after Emulex Corp. warned that orders being deferred could lead to flat sales growth for the first three months. Shares of Emulex, the market leader in fiber channel storage networking products, hemorrhaged nearly half their value, falling $37.13, to close at $40.38 in Nasdaq trading Monday. The 48% plunge was the largest drop Emulex has seen since a stock hoax Aug.

Apple Inc. Chief Executive Steve Jobs has been subpoenaed to testify by the Securities and Exchange Commission in a civil stock option backdating case against Apple's former chief counsel, according to two people familiar with the case. The subpoena should not suggest that Jobs is suspected of wrongdoing, according to the people, who asked not to be identified. The subpoena is not a public record. An Apple spokesman declined to comment.

Federal prosecutors ramped up their attack on alleged stock option fraud Wednesday, charging that former executives of a voicemail technology company awarded options to phantom employees, then shifted those awards to a "slush fund" to reward favored workers. The Justice Department case against former Comverse Technology Inc.

Members of Congress on Wednesday said they might seek to repeal a measure that was meant to put a lid on executive pay but may have instead triggered ever-richer stock option deals. At issue is a 1993 tax provision that barred companies from deducting salaries above $1 million as a business expense unless they were tied to performance.

Increases in U.S. consumer prices accelerated in July and home construction declined, evidence that a weakening economy has yet to damp inflation, economists said in advance of government economic reports this week. The consumer price index rose 0.4% in July after a 0.2% gain in June, according to the median forecast in a Bloomberg News survey before the Labor Department's report, expected Wednesday. Core prices, which exclude food and energy, are forecast to have risen 2.

Apple Computer Inc. said Wednesday that Chief Executive Steve Jobs knew the computer maker had sometimes changed the grant dates on stock options to make them more valuable -- an improper accounting practice that has tripped up more than 100 companies. Apple said a three-month internal investigation into the timing of stock option grants had resulted in the resignation of former Chief Financial Officer Fred Anderson from its board of directors. The Cupertino, Calif.