Backdating Settlement in Motion, Redux
Two weeks after Canadian regulators dropped the hammer on Blackberry maker Research In Motion for its stock option backdating scheme, the Securities and Exchange Commission has dropped it again. Today, the agency charged RIM CFO Dennis Kavelman, former VP of Finance Angelo Loberto and co-CEOs James Balsillie and Mike Lazaridis with illegally granting stock options to company executives and employees over an eight-year period from 1998 through 2006. “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,” said Linda Chatman Thomsen, director of the SEC’s Division of Enforcement, in a statement. Worse, the four executives subsequently made “false and misleading disclosures” about how RIM (RIMM) priced and accounted for options. Without admitting (or denying) guilt, the four execs agreed to settle the matter. Each will disgorge the in-the-money value of backdated options they exercised and pay a fine ranging between $150,000 and $500,000–far less steep than the $75 million in penalties ordered by the Ontario Securities Commission.
