In an action that has received little publicity here in the states, Jim Balsillie and three executives of his company, Research In Motion, have settled with the Securities and Exchange Commission a charge of back dating employee stock option grants. CFO Dennis Kavelman, VP of Finance Angelo Loberto, and co-CEO's Mike Lazaridis and Jim Balsillie have settled with the SEC the charge of back dating options from 1998 through 2006. These four executives, while neither admitting or denying the charges, have settled with the SEC for $1.4MM cumulatively. "As alleged in our complaint, RIM and its highest level executives engaged in widespread back dating of options which provided them and their employees with millions of dollars in undisclosed compensation," said Linda Chatman Thomsen, Director of the SEC's Division of Enforcement. Additionally, the Ontario Securities Commission brought a related action against the Rim executives, which was settled for $76.85 million Candian dollars as well as other sanctions related to this action.
This is remarkably similar to the situation that Broadcom founder Henry Samueli found himself in last year. Samueli is the owner of the Anaheim Ducks, which he purchased in 2005. The total in the Samueli case was $2.2 billion of backdated options. Samueli is awaiting sentencing, which will occur August 30, 2009, and he could face up to five years in prison for his role in the scheme.
The last thing the NHL needs is an owner (or owners) of questionable character and judgement. This type of behavior is reflective of the character of the principals involved, and shows a blatant disregard for the rules. Can the NHL really stand an owner that can't play by the rules?
Was this as nefarious as the Broadcom deal? I thought it was more like the Apple situation, an issue of accounting but not quite up to the level of criminality.
ReplyDeleteWhen Bettman was in town I got to sit in on the media session, and I asked him about whether these charges might get in the way of a potential Balsillie ownership bid. He refused to speculate on it since there was nothing specific in the works, and I missed the opportunity to broaden the question: would the fact that a guy has been banned from being an officer or director of a public corporation by the SEC and OSC stand in the way of becoming an NHL owner, regardless of the individual?
It is really amazing how many NHL owner types have shady dealings in their past. Hopefully, our "non-Boots" owners will continue to run a clean ship. However, dirt seems to be the only thing the Tennessean finds attractive about the Preds, especially after that fiasco last week on the taxes.
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