SEC Charges Research In Motion Execs $2.27 Million For Stock-Option Backdating
The Securities and Exchange Commission (SEC) has announced that they have reached a settlement with Research In Motion Limited (USA) (NASDAQ:RIMM). Four of RIM’s top executives have agreed to pay $2.27 million in penalties, disgorgement, and interest. This settlement is taking place less than 2 weeks after the RIMM executives settled charges similarly with the Canadian government. The fines in Canada amounted to about $30 million. This is the largest penalty levied on individuals by the Ontario Securities Commission.
The four executives illegally gave undisclosed in-the-money stock options to RIM employees backdating millions between 1998 and 2006. The four executives include RIM co-CEOs Jim Balsillie and Mike Lazardis, VP of Finance Angelo Loberto, and CFO Dennis Kavelman.
“As alleged in our complaint, RIM and its highest-level executives engaged in widespread backdating of options, which provided them and other employees with millions of dollars in undisclosed compensation,” stated SEC enforcement director Linda Chatman Thomsen.
The executives essentially made false claims about how the company prices and accounts for options.