Former RIM exec denies insider trading
A former vice-president at Research In Motion is denying allegations by the Ontario Securities Commission that he made nearly $300,000 by improperly buying shares in a company that the BlackBerry maker eventually acquired in 2009.
Paul Donald issued a statement Thursday that disputed the OSC claim that he had insider knowledge surrounding RIM's takeover of Certicom Corp., which started in the summer of 2008.
"I believe the allegations by the OSC that I have breached insider trading provisions to be without merit," Donald said in the statement. "In the summer of 2008 I was working at Research In Motion two days a week. I was not involved in RIM's discussions with Certicom and did not know about them."
The OSC accused Donald on Thursday of violating provincial securities laws.
In court documents posted on its website, the OSC alleges that on Aug. 20, 2008, Donald attended a golf and dinner function for RIM executives.
At the function, the OSC alleges, Donald and a RIM executive talked about facts related to Certicom that had not been generally disclosed, including the fact that RIM was in acquisition talks.
The OSC documents also allege that Donald was led to believe that Certicom's current share price was dramatically undervalued.
According to the OSC, Donald began purchasing Certicom shares the following day and in under a month acquired 200,000 shares, from which he made a profit of $295,000.
The commission documents noted that Donald never before had purchased shares in Certicom, which was a provider of cryptography required by software vendors and device manufacturers to embed security in their products.
RIM launched a hostile takeover bid for Certicom in December 2008 and after three months of legal wrangling the BlackBerry maker succeeded.
In his statement, Donald described the discussion at the golf function as a "casual conversation" in which he and a colleague discussed companies they thought were undervalued.
"My colleague at no time suggested to me that he was a 'person in a special relationship' with Certicom or that RIM had been in confidential discussions with Certicom," Donald said in the statement.
"I learned about many of the background details of RIM's dealings mentioned in the OSC's allegations for the first time upon reading the allegations," said Donald.
Donald's lawyer Kevin Richard said his client is ready to defend against the allegations and looks forward to being "fully exonerated."