The Ontario Securities Commission is seeking a penalty as high as $100 million from the top two executives of Research In Motion Ltd. in connection with their roles in a stock option accounting controversy. The Globe and Mail reports that the OSC is in “advanced discussions” with lawyers for RIM’s co-chief executive officers, Jim Balsillie and Mike Lazaridis, with the OSC pushing for Mr. Balsillie to pay the bulk of any penalty.
The Globe and Mail article states that
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.
The committee estimated the value of benefit to the two men was about $1.6-million (U.S.) each, gains that they have already repaid, along with full legal costs, to the company.
To date, the largest penalty ever paid by individuals to the OSC came from former Laidlaw Inc. CEO Michael DeGroote, who agreed to pay $23 million in 1993 to settle allegations of illegal insider trading.