updated 02:00 pm EST, Mon March 5, 2007
RIM backdating scandal
Creators of the ubiquitous BlackBerry, Research In Motion has suffered a double blow as a result of continuing probes into stock backdating. The first is the voluntary resignation of co-CEO Jim Balsillie, who was involved in approving stock grants after the company's IPO in 1997; the second is a planned restatement of finances, which will reach as far back as fiscal 2004 and cut earnings down by $250 million. No other employees are likely to be forced out.
While RIM convened its own committee, the US Securities and Exchange Commission (SEC) has been formally investigating a number of companies for backdating, including the likes of Activision and Dell. The accusation is that executives have been giving artificial dates for their stock options, inflating their value at the cost of the rest of the company. This strategy is not necessarily illegal, but it must be fully disclosed to avoid fraud charges. [via Associated Press]