RIM starts review of historical stock option grants
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BlackBerry maker Research In Motion  Ltd.  announced on Thursday that its audit  committee would voluntarily review historical stock-option  grants to employees, and has determined that a restatement of  its financials might be required.
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WASHINGTON -- The government is aggressively investigating the suspicious timing of stock options granted to top executives at scores of companies, federal officials said yesterday.
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(InfoWorld) - Research in MotionÂ (RIM) will search for a new chairman of its board after CEO Jim Balsillie stepped down from the job Monday, taking blame for his role in a stock-option scam that will cost the company $250 million in restated earnings. RIM, which makes the BlackBerry smartphone, will restate its annual earnings statements for fiscal years 2004, 2005, and 2006, and its statement for the first quarter of 2007. The changes could also affect its second and third quarter statements for 2007, which areÂ not yet filed, since RIM's internal audit is not complete. Balsillie will keep his other titles as co-CEO and a member of the board, but he and other top managers will be forced to pay back the profits they made by hand picking the most profitable dates for buying their stock options instead of receiving them the same date they were awarded, the company said. Employees can inflate their profits by claiming they received stock options on a day when the market was low, then selling them when the market rises again. Many technology companies have restated earnings caused by that practice in recent months, includingÂ Apple,Â Broadcom,Â McAfee, andÂ Monster Worldwide, as well asÂ Pixar, the computer animation film studio. Hoping to avoid lawsuits and regulatory censure, RIM began an internal investigation of stock option granting and accounting in August 2006, and predicted one month later that the damage would be between $25 million and $45 million. The company now says the true amount will be nearly 10 times that estimate. RIM also says it is cooperating with accounting investigations by the U.S. Securities and Exchange Commission (SEC), the Ontario Securities Commission and a shareholder lawsuit filed in Canada's Ontario Superior Court of Justice. RIM's investigation covered more than 3,200 grant packages made between December 1996 and August 2006. So far, the review committee has found incorrect accounting for all options granted before Feb. 27, 2002, and in 63 percent of the grants made since then. The recent batch includes 321 grants for a total of 4.6 million shares. Balsillie resigned as chairman because the review showed that he had personally made or approved all grants made since RIM went public in 1997, except for those to himself and co-CEO Mike Lazaridis. RIM Chief Financial Officer Dennis Kavelman also helped to administer the awards. Balsillie told an internal review committee that he used the grants to attract skilled employees to the company in a competitive industry, and he made them so informally because of the RIM's rapid growth at that time, according to a company statement released Monday about the review. Balsillie and Kavelman also told the committee "they had a general understanding" that options could be granted at any chosen date within the fiscal reporting period. "Their understanding was incorrect," the committee said in its report. "The Special Committee determined that the company failed to maintain adequate internal and accounting controls with respect to the issuance of options in compliance with the company's stock option plan ... the grant process was characterized by informality and a lack of definitive documentation, and lacked safeguards to ensure compliance with applicable accounting, regulatory and disclosure rules." In other fallout from the investigation, Kavelman will step down as CFO, taking a new job as chief operating officer for administration and operations. Balsillie and Lazaridis will pay the company $5 million each to defray the cost of the investigation, and RIM accepted the resignations of Kendall Cork and Doug Wright, two members of the board's compensation committee. Finally, RIM promised to establish an oversight committee, charged with examining executive compensation, insider trading and hiring practices. Â
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Finding itself amid a wave of technology companies under investigation in both the US and Canada for granting backdated options without reporting their values as charges, RIM announced this morning it may have to restate prior years' earnings up to 2003 to the tune of USD$220 million, with additional restatement of perhaps $5 million per year thereafter.
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By Kathryn Balint, The San Diego Union-Tribune  Sep. 15--Applied Micro Circuits said yesterday it will restate earnings  as far back as 1998 after an internal review concluded that different  measurement dates should have been used to compute some of the company's stock  option grants.
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Backdating to the Future Research In Motion today placed a 'preliminary' tag beside its Q2s, warning that the results could restated, subject to an audit of option grants, also announced today.â¦
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The U.S. Justice Department is investigating possible antitrust violations at the Chicago Board Options Exchange and the American Stock Exchange, according to the National Association of Securities Dealers annual report.
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The stock may be an opportunity for trend-bucking investors, if they ask the right questions.
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Expected restatement comes as a result of its internal investigation into stock options practices.
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Research In Motion (RIM), the manufacturer of the popular Blackberry mobile, has been left with a curate&#39;s egg to mull over for Christmas.
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U.S. antitrust regulators are investigating possible anti-competitive practices at the American Stock Exchange and Chicago Board Options Exchange, according to the annual report of the National Association of Securities Dealers.
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Google has received the green light for its initial stock offering -- but not without ruffling a few feathers at the Securities &amp; Exchange Commission, which oversees share offerings. The SEC&#39;s job is to make sure that companies disclose all the ...
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THE REGION Sapient Corp., a technology consulting company, said the Securities and Exchange Commission is investigating the company's stock options granting practices. Sapient will cooperate fully with the commission, the Cambridge company said in a regulatory filing. Sapient said last month that an internal review of the practices had ended and found no misconduct.
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The Securities and Exchange Commission has looked into whether lobbyists provided hedge funds with potentially market-moving information about a pending congressional speech.
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WATERLOO, Ontario -- BlackBerry maker Research In Motion Ltd. said Monday it will restate its financial statements as far back as fiscal 2004 because of past stock option reporting errors and it anticipates a $250 million reduction in previous earnings. Chairman and co-CEO Jim Balsillie is stepping...
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U.S. regulators are looking into  whether Wall Street firms are providing insider information on  upcoming offerings, either on purpose or inadvertently, the  Wall Street Journal reported on Thursday.
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(InfoWorld) - Rambus will pay $18 million to settle a class-action lawsuit over stock-option accounting. The suit was filed last year on behalf of shareholders afterÂ the audit committee of Rambus's board of directors found that the company had improperly accounted for stock-option grants. Under the settlement, which still needs court approval, all claims against all defendants in the case would be dismissed, according to the company. The audit committee found that option grants to employees had been misdated and the company had improperly accounted for those grants. Rambus had to restate results for 2003 through 2005 and the first quarter 2006 as a result of the investigation. Rambus, in Los Altos, California, makes memory technology. Last month, Rambus settled its own suits against all but one former executive for more than $6.5 million. As part of that deal, claims were dropped against all the former executives except Ed Larsen, former vice president of human resources and senior vice president of administration, who worked for the company from 1996 to 2004. Rambus was one of scores of technology companies, including Apple, McAfee, and Broadcom, that have been embroiled in controversy surrounding accounting for backdated stock options. Many companies used backdating to try to give new employees a greater windfall when they exercised their options.