An Ontario Securities Commission hearing will on Thursday decide whether to approve a proposed settlement with Research in Motion, the Canadian, maker of the BlackBerry family of smartphones, and the company’s senior executives ending a long-running controversy over the backdating of stock options.

The commission staff and RIM announced agreement on the proposed settlement with company and eight senior executives including James Balsillie and Mike Lazaridis, RIM’s co-chief executives, earlier this week following an investigation into a stock option accounting controversy dating back to 1996.

The OSC had alleged that Mr Balsillie, Mr Lazaridis and other RIM executives “engaged in the grant of options, in which option backdating or option repricing occurred”.

About 1,400 options that were issued over 10 years ending in July 2006 were incorrectly backdated to increase the value of the securities, the OSC claimed. The Toronto Stock Exchange prohibits companies from pricing options at a lower price than the market price on issuance.

Terms of the proposed settlement have not been disclosed although the OSC said that about half the benefits said to have been gained from the repriced options, or C$33m ($27m, €21m), had been repaid or the options had been cancelled.

Canada’s Globe and Mail newspaper, citing unidentified sources, reported last month that the country’s regulators had been seeking a record penalty as high as C$100m from Mr Balsillie and Mr Lazaridis related to the options issue.

The OSC investigation followed RIM’s own internal investigation which concluded in March that there had been no intentional misconduct by executives, directors or other employees responsible for administering options grants. However, Mr Balsillie stepped down as chairman at the time as the company revealed an earnings restatement relating to mistakes in how it granted the options.

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