The joint chiefs of Research in Motion (RIM), the company which makes the popular Blackberry phone, will pay about C$77 million (£43.2 million) in fines and restitution for wrongly backdating stock options for more than a decade.

The settlement is the latest in a series of scandals centred on the practice, where stock options given to employees are retroactively dated to increase their value. More than 100 companies have been investigated by regulators in the US and Canada, including Apple Inc.

As part of the settlement made with the Ontario Securities Commission (OSC), Jim Balsillie, the co-chief executive of RIM, will step down from the company’s board for a year.

“We accept that we’ve made mistakes and absolutely we take full responsibility for that, don’t duck it one bit,” Mr Balsillie said.

“We take this very seriously, the trust of public markets, and we’ve made mistakes, and we’ve done absolutely everything that we think appropriate to get our governance practices” in proper order.

Mr Balsillie, who has already stepped down as chairman, will pay C$5 million to the OSC and C$700,000 toward the costs of its investigation. Mike Lazaridis, the co-chief executive, will pay C$1.5 million in fines.

The two men and another senior RIM executive, Dennis Kavelman, must also repay a total of C$38.3 million to RIM and CA$44.8 million tocover the investigative costs.

The OSC opened its inquiry into RIM in 2006 and started negotiating a settlement last year. An investigation by the company revealed that it had backdated more than 40 per cent of stock options granted to its employees since 1996, including 12 of 16 option grants made to Mr Balsillie and Mike Lazaridis, the co-chief executive.

RIM meanwhile announced that it has made a settlement offer to the US Securities and Exchange Commission (SEC) to resolve the SEC’s separate investigation of RIM’s stock option granting practices.

Q: What is stock option backdating?

A: Options backdating involves granting an employee a stock option that is dated before the date that the company actually granted the option. The practice of backdating itself is not necessarily illegal – it depends on whether shareholders or regulators are misled.

Q: When does it become illegal?

A: If the stock plan of a company provides that options must be granted at a price no lower than fair market value on the date of the option grant, then backdating can mislead shareholders by offering options that are more favorable than the shareholders originally approved.

Q: Who has been investigated?

A: A series of investigations in America three years ago identified backdating at more than 130 companies. The investigations led to the firing or resignation of more than 50 top executives and directors. Notable companies embroiled in the scandal include Broadcom Corp, UnitedHealth Group and Comverse Technology.

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