Regulators in Canada may hit RIM's top two executives with a record penalty as high as C$100 million (U.S. $80 million) for their roles in a stock option backdating matter that began more than a decade ago, according to a report in the Globe and Mail. Ontario Securities Commission staff and lawyers representing RIM's co-CEOs Jim Balsillie and Mike Lazaridis are reportedly in advanced discussions, the paper said. From the news report:
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.
In March 2007, RIM said that the internal review found no intentional misconduct. Still, Balsillie stepped down as chairman and the company annouced a $250 million restatement to its earnings related to the mistakes it made in granting stock options. Technology analyst Carmi Levy told Reuters that the news of the fine, while possibly larger than RIM had expected, was no surprise. Regulators, she said, are "just attaching a number to something that people have known about and understood for quite some time."