despite the Black Berry maker announcing a change to its board of directors and taking a 0-million (U. Options are supposed to be granted with an exercise price equal to the company's share price, so they only become valuable in the future if the share price rises. Lascaris added his client will proceed with its lawsuit despite yesterday's announcement. regulators will continue to investigate Research in Motion Ltd. The review found instances in which "hindsight was used" to select favourable dates to grant stock options, resulting in employees getting options that were already valuable when they were granted.
Furthermore, since 1995, when FASB issued FAS 123, Accounting for Stock-Based Compensation, companies have been required to record in-the-money grants as a compensation expense.
(In 2004, FAS 123 was revised to require that all stock-option grants be expensed.) Brocade’s crime, charges the Do J, is that between 20, company executives “routinely backdated stock option grants to give employees favorably priced options without recording necessary compensation expenses.” Ultimately, the alleged criminal fraud is a disclosure and accounting issue that violates Section 10 (Manipulative and Deceptive Devices) of the Securities Exchange Act of 1934.
Ontario Securities Commission spokeswoman Wendy Dey said the commission's review is continuing, but would not comment on whether RIM negotiated its proposed governance changes with the OSC prior to yesterday's announcement.
She stressed RIM's news release yesterday was "a report of RIM's own investigation -- it is RIM's own report." Mr.
He said it was an error due to a misunderstanding of accounting rules. executives and directors have resigned or been fired after internal reviews of options backdating problems. The company hopes to put its stock options issues in the past, but regulators say they are continuing to probe RIM's options practices. "When a company does an internal review, that helps speed our process, but it's not a substitute for our process," one U. RIM also announced it has appointed two new independent directors and is searching for two others. Balsillie and co-CEO Mike Lazaridis will pay $5-million each to cover the company's costs of investigating the options problems.
The admission makes RIM the first major Canadian company to get caught up in an options backdating scandal that has swept through the United States, leading to charges against some executives and forcing billions of dollars in earnings to be restated. The special committee report said all option grants, except those to the co-CEOs, were made under Mr.
At least that seems to be the conclusion reached by the Department of Justice and the Securities and Exchange Commission regarding their first case against executives charged with fraud related to backdating.
Last week the Do J brought criminal charges against two Brocade Communications Systems executives, while the SEC filed a civil suit against the same two and the CFO.
And if the price went up [by the grant date] well, guess what, that's backdating." But the special committee report does not attribute all the company's backdating problems to a mistaken belief that options were to be priced at the time they were promised to an executive or future hire.
Indeed, the report says the company was "inconsistent" about when it chose a date to determine the exercise price of its options.
You can ask for a backdate if there is a reason that you did not apply for benefit earlier.