RIM execs urged to pay record stock option fine
updated 01:20 pm EST, Thu January 22, 2009
RIM execs face record fine
The Ontario Securities Commission (OSC) is urging the top two executives at BlackBerry handset maker Research In Motion (RIM) to pay a penalty because of their involvement in a stock option accounting scandal that dates back to 1996, according to a Thursday report. The fine could be as high as a record $100 million for the Canadian firm's co-CEOs Jim Balsillie and Mike Lazaridis. The OSC is reportedly in talks with the RIM CEOs' lawyers on a settlement after launching its investigation back in 2006.
The OSC is urging Balsillie to pay the majority of the fine and temporarily step down from RIM's board of directors. With rumors of a deal being nearly complete, there is still nothing official. Balsillie has no comment on the matter, dismissing it as rumors, while neither the OSC nor Lazaridis have responded regarding the case.
In 2007, a RIM committee investigated the backdating allegations, finding more than 40 percent of employee stock options granted since 1996 were improperly backdated. Backdating involves retroactively pricing a stock option to when it was at a lower value; 12 of the 16 option grants to the two CEOs were priced using a wrong date, amounting to an estimated $1.6 million in potentially inappropriate profit for each CEO. These gains have already been repaid to the company along with full legal costs.
The RIM board review voluntarily revealed the stock option backdating to the OSC and the US Securities and Exchange Commission, which promised to treat companies that did so more favorably. RIM has since restated its financial statements dating back to 1999, recording a $248 million CAD after-tax expense.
Both Balsillie and Lazaridis have agreed to pay a total of $7.5 CAD million each to RIM as a financial settlement and to compensate for the investigation costs. However, this settlement didn't involve an admission of wrongdoing.
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RIM Ex corruption
What the current OSC charges against RIM prove is that they are capable of conspiracy to commit wrongdoing and try and cover it up. See www.cancerfraudbadbiotech.com and realize they have acted since 1996 this way. and the allegation is that they influenced PM Martin to act to stop US fraud charges against UW. There is a more likely than not basis now proven.E.A.Greenhalgh