RIM Stock Option Scandal Settlement
In 2007 Co-CEO Jim Balsillie was forced to resign as chairman as the company announced a $250-million earnings restatement relating to mistakes in how it granted stock options. Furthermore, an internal review found that hundreds of stock-option grants had been backdated, timed to a low share price to make them more lucrative.
In January 2009, Canadian regulators stated that they were seeking a record penalty of $80 million USD from the top two executives, Co-CEOs Jim Balsillie and Mike Lazaridis. Furthermore, the Ontario Securities Commission (OSC) has pushed for Balsillie to pay the bulk of any penalty and relinquish his seat on RIM's board of directors for a period of time.
On February 5, 2009, several executives and directors of Research In Motion agreed to pay the penalties to settle an investigation into the backdating of stock options. The Ontario Securities Commission approved the arrangement in a closed-door meeting.
Under the terms of a settlement agreement with the OSC, RIM co-chief executive officers Jim Balsillie and Mike Lazaridis, as well as chief operating officer Dennis Kavelman, will jointly pay a total of $68-million (CDN) to RIM to reimburse the company for losses from the backdating and for the costs of a long internal investigation. The three are also required to pay $9-million (CDN) to the OSC.
Mr. Balsillie will step down from RIM's board of directors for a year, but will remain in his executive role.
Read more about this topic: Research In Motion
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