RIM CEOs Reach Settlement With Regulators - InformationWeek
IoT
IoT
IT Leadership // IT Strategy
News
2/5/2009
02:05 PM
50%
50%
RELATED EVENTS
CAO Discusses Their Roll & The Skills Needed to Do the Job
Jul 26, 2017
LWhat does a chief analytics officer do each day? To help us answer that question we welcome Dun & ...Read More>>

RIM CEOs Reach Settlement With Regulators

Canadian regulators were seeking to fine the co-CEOs about $80 million for their roles in a backdating scandal that stretched back more than 10 years.

Research In Motion's co-CEOs, Jim Balsillie and Mike Lazaridis, have reportedly reached a settlement with the Ontario Securities Commission regarding an $80 million fine for a backdating controversy that lasted for about 10 years.

An OSC judiciary panel will decide today whether to accept the settlement. The agency has said the BlackBerry maker "did not take reasonable steps to provide proper oversight in relation to RIM's options granting practices."

The main issue is an improper stock-dating practice that came to light in 2007 when it was discovered that nearly 40% of RIM's stock options granted since 2006 had been backdated. Backdating involves retroactively giving employees a stock purchase price that corresponds with the stock's lowest point, instantly creating a gain for the purchase.

RIM paid $45 million to investigate the issue and found that the CEOs had acquired 2 million backdated shares each, which earned them about $1.6 million apiece. Balsillie and Lazaridis have repaid the earnings and have paid $7.5 million toward the investigation costs. Balsillie also stepped down as chair, but remains co-CEO.

The company had to restate its earnings back to 1999, recording $250 million after-tax expenses because of the improper stock-dating practice. RIM's investigation said the company "did not find intentional misconduct on the part of any director, officer, or employee responsible for the administration of the company's stock grant program."

The fine would have been one of the largest in Canada's history, and it's unclear how much the settlement is. Thanks to a strong presence in the enterprise market with the BlackBerry smartphones, RIM is worth about $37 billion, and the co-CEOs are estimated to be worth about $2 billion each.

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
IT Strategies to Conquer the Cloud
Chances are your organization is adopting cloud computing in one way or another -- or in multiple ways. Understanding the skills you need and how cloud affects IT operations and networking will help you adapt.
Video
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll