Remember all of the hoopla surrounding RIM’s hostile takeover of Certicom? Well the Ontario Securities Commission sure does, as it’s alleging that former RIM VP Paul Donald personally profited from the deal thanks to some insider trading. The OSC claims that back in August of 2008, Donald was attending a RIM function where RIM top brass informed him that they were actively trying to acquire the software encryption specialists Certicom — a company whose technology is used in every single BlackBerry smartphone. Although Donald was told that Certicom was resisting the takeover, he quickly purchased 200,000 shares in the company after learning it was “dramatically undervalued,” and shortly thereafter RIM announced its intentions to purchase. That announcement also had RIM run afoul of the OSC, as Certicom’s board asked the commission to block the buyout on the grounds that Certicom investors would get a raw deal. Despite this, the aquisition eventually went through which saw Donald net $295,000 in profit. Donald, who the OSC said acted, “with knowledge of material facts about Certicom that had not been generally disclosed,” and whose purchase of the shares were, “contrary to the public interest,” will be front and center as the OSC holds a hearing on June 7th. More →
Remember when we told you that the Ontario Securities Commission (OSC) was looking to fine RIM co-CEOs Mike Lazaridis and Jim Balsillie up to $100 million CDN ($81.1 million USD) for their role in stock option backdating that went on from 1996 to 2006? Well, the gauntlet of justice has just smacked the co-CEOs in the head to tune of $77 million CDN ($62.5 million USD). 88% of the $77 million is to be paid back to RIM itself and the rest of the money to be handed over to the OSC itself. What’s more is that Balsillie will step down from the Board of Directors for one year but will be permitted to stay on as co-CEO. It’s rather strange that the OSC would ask Balsillie to step down from the Board but permit him to stay on as co-CEO – we suppose it goes to show that the OSC understands how integral Balsillie is to the health of the company. Apparently he also managed to convince the OSC that he learned his lesson and won’t be committing any more white collar shenanigans. So what does Balsillie have to say about this whole matter? “We’re very pleased to put this behind us.” No doubt.
Regulators could possibly fine RIM co-CEOs up to $100 million CDN for role in decade old stock controversy
Um, wow. Just wow. Remember how Mike Lazaridis and Jim Balsillie, the co-CEOs of RIM, got in trouble all the way back in 2006 after being busted for stock options backdating? They had apparently been doing it since 1996 and it eventually led to Balsille steping down as Chairman. The Ontario Securities Commission apparently remembers the incident well, and boy does it ever seem like it’s out for blood now. A report today from Canada’s The Globe and Mail said that the OSC is seeking up to a $100 million CDN ($79.48 million USD) fine for the co-CEOs. Apparently Balsillie is the one that should be the most worried as he’s facing the bulk of the fine, but the OSC is also alleged to be pushing for him to step down from his role on the board of directors for an unspecified period of time. Lazaridis, who is of course the big brains behind the famous BlackBerry devices the company makes, would likely only have to pay a small portion of the fine. During the investigation into the matter, both Balsillie and Lazardis paid approximately $7.5 million CDN for legal costs so that RIM itself would not be financially burdened for their wrongdoings. By now you’re probably wondering, “Wow! How much did they make through backdating options?” About $2 million CDN each. [Insert crime doesn't pay remark here]
Certicom, whose encryption software is featured in every BlackBerry device on the market as well as countless other handsets, has publicly urged its shareholders to reject a proposed hostile takeover from RIM. RIM has offered $1.50 per share ($66 million CAD) for the Mississauga, Ontario-based company, a figure which the company feels is grossly inadequate. In a full page advertisement published in a nationally syndicated Canadian newspaper, Certicom’s directors asked that its shareholders reject RIMs offer for several reasons including: 1) The offer does not even match cash on hand and assets. 2) Certicom’s new leadership has increased revenue by 54% year-over-year. 3) RIM violated previous confidentially and standstill agreements. Certicom has an appearance scheduled in the Ontario Superior Court of Justice on January 9th and has filed for a cease of trade with the Ontario Securities Commission. RIM continues to argue that its offer is not only fair but will greatly benefit Ceritcom and its shareholders.