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U.S. prosecutors reviewing RIM options grants
2007-04-25
U.S. prosecutors in New York are reviewing stock option grants at BlackBerry maker Research In Motion Ltd. (Toronto:RIM.TO) (Nasdaq:RIMM), the company said on Wednesday. RIM said it has been in contact with the office of the U.S. Attorney for the Southern District of New York after learning it was reviewing the company's option grants. It added it "intends to co-operate" with any requests for information the U.S. attorney's office may have. The U.S. Securities and Exchange Commission already has a formal investigation into how RIM granted options in the past, after upgrading its probe from an informal review. RIM is still working to finalize its financials and bring itself up to date with regulatory filings following a $250 million reduction to earnings in a restatement it announced in March. Co-Chief Executive Jim Balsillie also then announced he would give up his other role as the company's chairman. That restatement came as the Waterloo, Ontario-based maker of the popular BlackBerry wireless e-mail devices revealed mistakes in how it awarded stock options in the past. The company first began a voluntary review of options grants in late September. RIM has said that review covered more than 3,200 grants between late 1996 and August 2006 to more than 2,000 employees and directors. The review found that RIM failed to maintain adequate internal and accounting controls relating to options grants, both in terms of how the options were granted and documented, as well as the measurement date used to account for some grants. It also found the grant process "lacked safeguards to ensure compliance with applicable accounting, regulatory and disclosure rules," RIM said in March. More than 170 companies have been investigated by U.S. authorities or have conducted internal inquiries into possible manipulation of stock option grant dates. Some probes have resulted in criminal charges, including those laid against certain executives at Brocade Communications Systems Inc. (Nasdaq:BRCD) and Comverse Technology Inc. (Other OTC:CMVT).
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