(In U.S. dollars unless noted)
TORONTO, Feb 4 (Reuters) - Shares of BlackBerry maker Research In Motion RIM.TORIMM.O moved higher on Wednesday, ahead of a regulatory hearing that could see a final settlement with the company's top executives over their role in a controversy over the backdating of stock options.
The hearing to approve a tentative deal between RIM, the executives and the Ontario Securities Commission, is slated for Thursday.
RIM shares rose 1.9 percent to $56.59 on the Nasdaq market. They rose 1.6 percent to C$69.36 on the Toronto Stock Exchange.
Analysts have described RIM’s internal review of options grants, and a subsequent $250 million earnings restatement related to errors in how options were granted, as disruptive but ultimately immaterial.
The looming resolution of the “long forgotten” OSC options probe should be seen as positive, “though we believe unlikely to have material impact to share price movement,” UBS analysts Maynard Um and Jeffrey Fan wrote in a note to clients.
The amount of any fines to be levied against Waterloo, Ontario-based RIM or co-CEOs Jim Balsillie and Mike Lazaridis is not known. However, the Globe and Mail newspaper, citing unidentified sources, reported last month that regulators had been seeking a record penalty as high as C$100 million ($81 million) from the co-CEOs related to the options issue, which dates back to 1996.
The OSC has alleged Balsillie, Lazaridis and other RIM executives “engaged in the grant of options, in which option backdating or option repricing occurred”.
In 2007, stock-option backdating became a major issue across corporate America. More than 170 companies were investigated by U.S. authorities or conducted internal inquiries into possible manipulation of stock option grant dates to benefit recipients.
Some probes resulted in criminal charges, including those laid against certain executives at Brocade Communications Systems Inc. and Comverse Technology Inc.
$1=$1.23 Canadian Reporting by Wojtek Dabrowski; editing by Rob Wilson
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