The Ontario Securities Commission in a decision announced Thursday ruled that Paul Donald was in possession of material, undisclosed information when he bought more than $300,000 worth of stock in the Mississauga -based software maker in August and September 2008.
But he did not engage in insider trading under the Ontario Securities Act because at the time of his purchases the BlackBerry maker had not formally proposed a business combination with Certicom, even though an offer was a distinct possibility, the OSC said.
The securities market regulator will conduct a sanctions hearing on Sept. 13.
An OSC spokesman said sanctions could include trading prohibitions and bans on acting as a corporate director and officer. But he said the commission has jurisdiction to order administrative penalties or disgorgement of profits only in cases such as insider trading where Ontario securities law has been violated.
Lawyers acting for Donald did not immediately respond to requests for comment.
The OSC in its ruling said “market participants and officers of public companies, such as Donald, are expected to adhere to a high standard of behavior.” It said Donald’s behavior was “abusive of the capital markets and to confidence in the capital markets.”
Staff of the commission alleged that Donald discussed Certicom with Chris Wormald, RIM’s vice-president of strategic alliance, during dinner at the company golf event in Port Stanley, Ont.
The OSC says Warmald told Donald that Certicom was undervalued and a desirable property for RIM, but said he was frustrated by stalled takeover talks.
The OSC panel in it reasons said Donald the next morning told his broker to acquire Certicom shares at no more than $1.50 per share, with 200,000 shares purchased for a total cost of $305,000. RIM completed its $3 per share acquisition of Certicom in 2009.
The commission panel said in its findings that Donald, who dealt with telecom carriers in his role as code division multiple access vice president and worked at RIM for about a decade, realized a gross profit of $295,000 on the Certicom stock.
Donald, in testimony before the OSC, said the Certicom issue was discussed at the golf event in the general context of undervalued companies and said he bought shares after doing his own research into Certicom’s value and prospects. He denied that the information gleaned at the event was material or confidential.
Waterloo-based Research In Motion, meanwhile, has confirmed that it will launch its new line of BlackBerry PlayBook tablet PCs in Canada next week with a rollout on other cellular networks to follow in coming months in the U.S., Europe, South America, Latin America and the Caribbean.
Pricing will vary by region and provider but specifics were not announced.
RIM said the next generation device on the long term evolution communication standard that is popular with global carriers will have built-in support for cellular networks and enable faster data downloads.
It said the device will offer smoother video streaming, multi-party video conferencing and will reduce delays when more than one player use a video game.
The original PlayBook was launched in April 2011 but has struggled to compete with Apple’s iPad and tablets running Android software, in part because of the lack of cellular networks support.
Criticized as well for at for its lack of built in calendar and email, functions RIM added in a software upgrade this year, the device has been heavily discounted at retail outlets.
RIM has so far only sold Wi-Fi capable PlayBook devices that require access to a Wi-Fi network or a connection to a BlackBerry phone to browse the Internet.
The 4G LTE BlackBerry PlayBook with 32 gigabytes of memory will be available from carriers Bell, Rogers Communications and Telus on August 9.