Outline of Recent SEC Enforcement Actions - the Utah State Bar

All defendants have agreed to settle the SEC's charges without admitting or denying the
allegations in the SEC's complaint.
Quest consented to the entry of an order permanently enjoining it from violating certain
antifraud provisions, as well as the record-keeping, financial reporting, internal controls, and
proxy provisions of the federal securities laws.
Smith consented to the entry of an order permanently enjoining him from violating or
aiding and abetting violations of certain antifraud provisions, as well as the record-keeping,
financial reporting, internal controls, proxy, false statements to auditors, Sarbanes-Oxley
certification, and securities ownership reporting provisions of the federal securities laws. Smith
also agreed to pay a $150,000 penalty.
Laskey and Brooks each consented to the entry of orders permanently enjoining them
from violating or aiding and abetting violations of certain antifraud provisions, as well as the
record-keeping, financial reporting, internal controls, false statements to auditors, and securities
ownership reporting provisions of the federal securities laws. Brooks and Laskey agreed to pay
penalties of $60,000 and $50,000 respectively. Brooks also agreed to pay disgorgement of
$34,775, representing half of the in-the-money value of backdated options he had exercised (the
other half was previously repaid to the company), and prejudgment interest of $5,808.29. In
addition, Brooks, a certified public accountant, agreed to a five-year suspension from appearing
or practicing as an accountant before the SEC.
SEC v. Research in Motion Limited, Dennis Kavelman, Arcangelo Loberto, James Balsillie
and Mihal Lazaridis
Litigation Release No. 20902 (February 17, 2009)
http://sec.gov/litigation/litreleases/2009/lr20902.htm
Press Release (February 17, 2009)
http://sec.gov/news/press/2009/2009-27.htm
On February 17, 2009, the Securities and Exchange Commission charged BlackBerry
maker Research in Motion Limited (RIM) and four of its senior executives for stock option
backdating.
The SEC's complaint alleges that Ontario, Canada-based RIM, its former Chief Financial
Officer Dennis Kavelman, former Vice President of Finance Angelo Loberto, and Co-Chief
Executive Officers James Balsillie and Mike Lazaridis illegally granted undisclosed, in-themoney
options to RIM executives and employees by backdating millions of stock options over
an eight-year period from 1998 through 2006.
The SEC's complaint alleges that the defendants made false and misleading disclosures
about how RIM priced and accounted for options. In addition, according to the complaint, the
backdating violated the terms of RIM's stock option plan and a listing requirement of the Toronto
Stock Exchange. RIM's stock is listed on both the NASDAQ Stock Market and the Toronto
Stock Exchange.
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