Senior executives of Blackberry manufacturer RIM have settled with Canada's Ontario Securities Commission over charges that the company improperly backdated stock options.
Four executives, including RIM's co-CEOs and chief operating officer, will pay fines totalling about $75m (£51m), the company said. That includes compensation to RIM for benefits from incorrectly priced options for all employees who got them, as well as the costs of investigations by both RIM and the OSC.
Between 1996 and 2006, RIM executives were involved in the granting of stock options in which dates were changed to get a lower exercise price, which could create a greater windfall for employees as the stock rose, the OSC said.
Numerous IT vendors have been punished over the past few years for improper backdating, which was a common practice during the tight market for high-tech talent around the turn of the century.
RIM introduced the BlackBerry two-way pager in 1999 and has transformed the device into one of the leading smartphone platforms with the help of its encrypted e-mail service. It has annual revenue of nearly $10 billion.
President and co-CEO Mike Lazaridis, co-CEO Jim Balsillie, Chief Operating Officer Dennis Kavelman, and Vice President, Corporate Operations Angelo Loberto together will pay the $75m in fines. Executives Douglas Wright and James Estill, Director Emeritus Kendall Cork, and former RIM executive Douglas Fregin also were involved in the settlement.
RIM and the OSC agreed on a set of facts concerning the grants, but only for the purposes of settling this case, according to RIM.
The company said it offered a settlement to the US. Securities and Exchange Commission and has been informed that Balsillie, Lazaridis, Kavelman and Loberto also offered SEC settlements. The staff of the SEC's enforcement division has recommended the agency accept the settlements, but that does not guarantee they will stand, RIM said.
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