“The Ontario Securities Commission is seeking a record penalty – one that could be as high as $100-million – from the top two executives of Research In Motion Ltd. to pay for their role in a stock option accounting controversy dating back to 1996,” Jacquie McNish, Janet McFarland, and Paul Waldie report for The Globe and Mail.
“According to people familiar with settlement discussions, the OSC’s staff is in advanced discussions with lawyers representing RIM’s co-chief executive officers, Jim Balsillie and Mike Lazaridis. The OSC’s investigation began in 2006 and sources said the regulator began negotiating a potential settlement last fall,” McNish, JMcFarland, and Waldie report. “It is understood that the OSC has pushed for Mr. Balsillie to pay the bulk of any penalty and relinquish his seat on RIM’s board of directors for a period of time. Although one person familiar with the talks said the parties are nearing a potential agreement, nothing has been finalized, including how much each executive may have to pay.”
“In 2007, a special committee of RIM’s board investigated the back-dating issue, and determined the company had backdated more than 40 per cent of stock options granted to employees since 1996. It also concluded that 12 of the 16 option grants made to Mr. Balsillie and Mr. Lazaridis between 1996 and 2006, to acquire a total of two million shares, were priced using an incorrect date,” McNish, McFarland, and Waldie report.
“At the time the special committee report was released, RIM said all employees and executives agreed to repay any benefit they received from options that were incorrectly priced. Mr. Balsillie and Mr. Lazaridis additionally agreed to pay $5-million (Canadian) each to defray the company’s costs of its investigation and financial restatement,” McNish, McFarland, and Waldie report. “The two men later agreed to pay an additional $2.5-million (Canadian) each to the company to compensate it for its investigation costs as part of a settlement RIM reached in a class-action lawsuit brought by Canadian shareholders over the option backdating.”
Full article here.
MacDailyNews Take: They really need to get a third CEO at RIM, so they can be proper stooges.