Go to the Globe and Mail homepage

Jump to main navigationJump to main content


RIM executive accused of improper share buying Add to ...

A former vice-president of Research In Motion Ltd. has been accused of improperly buying shares of Certicom Corp. after allegedly learning at a company golf event that RIM was in confidential discussions to acquire the company.

The Ontario Securities Commission has alleged that Paul Donald, former vice-president at a RIM division known as Code Division Multiple Access, made a profit of $295,000 after buying 200,000 shares of Certicom in 2008 before RIM announced a takeover bid for the company.

According to an OSC statement of allegations, Mr. Donald attended a RIM golf and dinner function on Aug. 20, 2008, and sat a table with various company officials including vice-president Chris Wormald, who told him RIM had been in talks with Certicom about a possible acquisition. The OSC said Mr. Wormald revealed that RIM felt the encryption security company's share price was "dramatically undervalued."

The OSC said Mr. Wormald also reported that Certicom was not interested in a deal at that time, but said RIM had an ongoing interest in the smaller company.

"On the following day, Aug. 21, 2008, Donald began purchasing securities of Certicom," the OSC alleged. "Donald had never before purchased Certicom securities."

RIM launched a hostile takeover bid for the company in December, 2008, and entered into a deal to buy the company in February, 2009.

The OSC alleged that Mr. Donald received proceeds of $600,000 for his shares on March 26, 2009, through RIM's offer to acquire all the outstanding shares of the company. The commission alleged that he earned a profit of $295,000 on the deal.

The OSC said Mr. Donald bought the shares "with knowledge of material facts about Certicom that had not been generally disclosed" and acted "contrary to the public interest."

Mr. Donald said Thursday he "categorically denied" the OSC's allegations, calling them "without merit."

He said he worked at RIM only two days a week in the summer of 2008, was not involved in discussions about Certicom and did not know about the takeover talks.

"On Aug. 20 I had a casual conversation with a colleague at a golf course in which we discussed companies that we thought were undervalued," Mr. Donald said in a statement released late Thursday.

"I did not and do not believe our discussion involved any material information about any of the companies we discussed."

The OSC has scheduled a hearing in the case for June 7.

Report Typo/Error

Follow on Twitter: @JMcFarlandGlobe


Next story




Most popular videos »

More from The Globe and Mail

Most popular