The Ontario Securities Commission is seeking to levy a record fine that may be as high as $79 million against Research In Motion executives for their role in a stock-option backdating controversy dating back to 1996.
The OSC is reportedly in advanced settlement discussions with lawyers from RIM's co-CEOs, Jim Balsillie and Mike Lazaridis, over the fine. The securities watchdog began investigating RIM in 2006 and has been in settlement negotiations since 2007.
A special committee of RIM's corporate board determined in 2007 that the BlackBerry maker had backdated 40 percent of its stock options granted to employees since 1996. The committee also found that 12 of the 16 option grants given to the two chief executives from 1996 through 2006 had been issued using an incorrect date. At the time, the committee said that the options grants were used to purchase 2 million shares, and that the estimated value to the two executives was about $1.6 million, which they have since paid back to the company.
According to sources close to the settlement, Balsillie would pay the majority of the fine and would have to give up his seat on RIM's board for a period of time. If the $79.67 million fine is levied, it would be the largest fine the OSC has collected from individuals.
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