Woah. It looks like the Ontario Securities Commission has made their decision on a possible settlement with RIM over their backdating scandal. The news is fresh as of an hour ago, so I’m just going to quote straight from Reuters:
Research In Motion Co-Chief Executive Jim Balsillie will step down from the board and, along with other executives of the company that makes the BlackBerry smartphone, will repay tens of millions of dollars to settle stock-option allegations dating back to 1996.
Under the pact reached with the Ontario Securities Commission and approved on Thursday, Balsillie will pay a penalty of C$5 million ($4.1 million), while Co-Chief Executive Mike Lazaridis will pay a C$1.5 million penalty. The two men also must pay investigation costs to the regulator.
The agreement also stipulates that the two co-CEOs and RIM’s former CFO, Dennis Kavelman, will repay C$38.3 million to the company. They must also repay about C$30 million to cover the costs of a voluntary internal probe into the matter undertaken by RIM earlier.
Balsillie and Lazaridis had already paid C$15 million to offset the costs of the Waterloo, Ontario-based company’s internal review. Balsillie may not serve on RIM’s board for at least 12 months as part of the settlement, and Kavelman must pay a C$1.5 million penalty.
The OSC alleged the executives backdated and repriced stock options using dates on which the market price of RIM’s shares was relatively low. Handing out options at the lower prices had the effect of improperly enriching the recipients and, the OSC alleged, could have deprived RIM of about C$66 million.
It’s a huge chunk of change, but at least RIM can now put this whole affair behind them. You can see statements from Balsillie and the OSC after the jump.
RIM/OSC Settlement Statements
“We take this very seriously, the trust of the public markets, and we’ve made mistakes,” Balsillie told reporters after the hearing.
“Absolutely, we take full responsibility,” said, adding: “We’re 100 percent focused on work and moving forward.”
Ontario Securities Commission:
“The sanctions send the right message that the conduct that we saw here will not be tolerated by anyone,” OSC litigator Sasha Angus said of the pact, which will also see an independent consultant appointed to review RIM’s governance practices.
Independent technology analyst Carmi Levy said the size of the settlement is “not material at all” to the company’s fortunes, although RIM is probably pleased to have the matter behind it.
“It means that they can finally put this tenuous chapter behind them and get on with the business of competing in the smartphone market,” he said.