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RIM To Restate Earnings

The BlackBerry email device maker said it will restate $250 million in earnings, lowering profits, after an internal investigation found irregular practices of backdating stock option grants. Co-chief executive Jim Balsille will step down from the Chairman spot. File under "Oops!"

Yet another company falls prey to securities issues. This time RIM is facing the plank, though so far no charges have been brought against the Waterloo, Ont.-based company. The internal probe was launched 7 months ago and found that all options granted to employees before February 2002 were accounted for incorrectly, as were about 66% of those between 2002 and August 2006.

RIM says its internal probe found no evidence of intentional misconduct, but that didn't stop co-Chair Jim Balsille from being forced to step down from the Chairman spot. Balsille will remain with the company as a director. While Mike Lazirdis, RIM's other chief executive, will retain his post, both have agreed to shell out a whopping $4.2 million to RIM to cover the costs of the investigation. Two other RIM directors are resigning in wake of the scandal.

The report said, “The informality of the option granting process was, in part, a reflection of the stage of development of the company and the rapid growth occurring within the organization at the time."

In other words, RIM didn't mean to cheat the system a little bit, it just sort of happened along the way.

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