The SEC alleges that RIM (RIMM), its Co-Chief Executive Officers James Balsillie and Mike Lazaridi, its former Chief Financial Officer Dennis Kavelman and former Vice President of Financial Angelo Loberto “illegally granted undisclosed, in-the-money options to RIM executives and employees by backdating millions of stock options over an eight-year period from 1998 through 2006,” it said in a press release.
The SEC alleged that the four executives backdated option agreements and offer letters, concealing the fact that options were granted in the money. It also alleges that Kavelman and Loberto tried to hide the backdating from regulators, as well as the company’s independent auditor and outside lawyer.
The settlement involves, among other things, payment of fines by the individual defendants and disgorgement of the in-the-money values of backdated options they had exercised, with interest. Kavelman will pay a fine of $500,000 and disgorge $132,914.60; Loberto will pay a fine of $425,000 and disgorge $47,950.56; Balsillie will pay a fine of $350,000 and disgorge $334,250; and Lazaridis will pay a fine of $150,000 and disgorge $328,300.
The SEC noted that the settlement takes into account RIM’s cooperation with its investigation, and that the settlements are subject to the approval of the U.S. District Court for the District of Columbia.
The Ontario Securities Commission had on Feb. 5 brought a related settled action against the same defendants, the SEC noted, which included the total payment of C$76.85 million.
RIM is based in Ontario, Canada, and is listed on both the Toronto Stock Exchange and the NASDAQ Stock Market.
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