Research In Motion’s co-CEO and other executives have agreed to pay nearly $75 million to settle charges that tied to their role in stock-option backdating in the company. The deal, approved by a panel for the Ontario Securities Commission, calls for the company executives and the two co-CEOs, Jim Balsillie and Mike Lazaridis, to pay 38.3 million Canadian dollars (or US$31 million) for the benefits received because of the improper option grants.
The executives will also need to pay 44.8 million Canadian dollars for the RIM’s own internal investigation, and will pay 9.1 million Canadian dollars as an administrative penalty towards the regulator’s investigation.
Stock Options allow the recipients to buy stocks in the future at a set price, usually the market price when these were granted. Backdating involves pretending to have the options granted on an earlier date when the market was lower, allowing an opportunity for some extra profit.
The Wall Street Journal has said that this has been the largest settlement that the OSC gave to a company.