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Directors banned, sent for reeducation

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The joint chief executives, president, chief financial officer and other board directors of Research in Motion - the firm behind BlackBerry - have settled a probe by Canadian regulators over the backdating of stock options.

RIM is listed in Ontario as well as on Nasdaq. It admitted in 2006 that investigators were checking share option grants dating back to 1996.

The directors must pay back money to RIM and also pay the Ontario Securities Commission (OSC) the cost of its investigation.

Four directors - chairman of the board and co-CEO Jim Balsillie, president and co-CEO Mike Lazaridis, CFO Denis Kavelman and vice president of finance Angelo Loberto will pay $92m in total for failing to properly oversee RIM's granting of share options.

Of this $92m, $38.3m goes to RIM to repay the benefits of backdated or repriced options, $44.8m to cover RIM's costs in investigating and sorting out the options mess, and $9.1m to the OSC to cover the costs of its investigation.

Dennis Kavelman is banned from sitting on any Canadian board for five years. Angelo Loberto is banned from holding directorships until he completes a course on the duties of directors of public companies.

Another four RIM directors - Kendall Cork, Douglas Wright, James Estill and Douglas Fregin are all expected to undergo similar re-education.

The OSC's full judgement is here.

In addition RIM has agreed to an independent review of its corporate governance practices.

RIM said it had made an offer to settle a similar probe by the US Securities and Exchange Commission. The firm said SEC staff were recommending it be accepted but the deal still needs approval from the Commissioners.

RIM said: it was glad the matter was settled and it hoped to soon announce a similar agreement with the SEC.®

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