Report: Canadian regulators to fine RIM co-CEOs

TORONTO -- Canadian regulators are seeking a record penalty that could be as high as US$80 million from the two top executives of BlackBerry-maker Research in Motion for their role in a stock option-granting controversy, the Globe and Mail newspaper reported Thursday.

The Ontario Securities Commission is in advanced discussions with lawyers representing RIM's co-executives officers, Jim Balsillie and Mike Lazaridis, the newspaper said. The investigation began in 2006 and that they began negotiating a settlement last fall.

A RIM spokeswoman declined to comment. Calls to the Ontario Securities Commission were not immediately returned. Balsillie declined to comment on what he described as rumors, the paper said.

RIM said in March 2007 that Balsillie voluntarily surrendered the chairman's post as the smartphone maker disclosed it needed to cut roughly US$250 million from past earnings reports due to improper accounting for backdated stock options.

Balsillie and Lazaridis agreed to pay RIM up to six million Canadian dollars each to assist RIM in defraying costs from the options investigation and restatements.

The Waterloo, Ontario-based maker of the popular handheld device disclosed in April 2007 that it was under a formal investigation by the U.S. Securities and Exchange Commission in connection with its past options granting practices. The SEC has investigated more than 100 companies, including Apple Inc., over the issue in recent years and has reached settlements with a number of companies and executives since 2006.

RIM said in 2007 that a special committee determined that all options granted prior to Feb. 27, 2002, were accounted for incorrectly.

The special committee did not find intentional misconduct on the part of any director or officer, but said hindsight was used to select grant dates with favorable pricing for the employee recipients.

The company also said in 2007 that Balsillie was directly involved in approving grants following the company's initial public offering in 1997, including grants that have been found to have been accounted for incorrectly. Balsillie's role in approving grants decreased over time as more responsibility for approving certain grants was given to other employees.