Research In Motion disclosed that an informal Securities and Exchange Commission inquiry into the company’s stock-option practices has been elevated to a formal investigation.
The Waterloo, Ontario-based company, best known for its BlackBerry device, added that it believes that the focus of the investigation is substantially the same as for the informal inquiry. The company stressed that will continue to cooperate with the SEC and the Ontario Securities Commission.
Last month, the company announced that it would restate earnings by a total of about $250 million for fiscal years 2004 through 2006 and for the first quarter of fiscal 2007.
Research In Motion also asserted that co-chief executive officer Jim Balsillie was directly involved in approving grants, “including grants that have been found to have been accounted for incorrectly.”
The company noted that this involvement gradually diminished, but only because more responsibility for approving certain grants was delegated, without explicit conditions or documentation, to chief financial officer Dennis Kavelman and other, less senior employees. Some of these grants were also “accounted for incorrectly,” Research In Motion added.