RIM exec gets five-year ban for Certicom purchase

The panel had ruled in August 2012 that Donald’s trading did not technically breach securities laws because RIM wasn’t on the verge of making a bid for Certicom. However, it did find that he violated the public interest by trading with knowledge of undisclosed material facts.

OSC panel rules insider trading by RIM exec was “abusive”

In its reasons and decision published Thursday, the panel issued orders prohibiting Donald from acting as an officer or director of a reporting issuer for five years, and requiring him to pay $150,000 in costs.

According to the decision, OSC staff sought much tougher sanctions, including 10-year bans on trading, acting as a director or officer, and from relying on exemptions. They argued that the allegation proven in this case “involves serious conduct contrary to the public interest that deserves a severe sanction.” It also notes they argued he is at risk of re-offending, given that he has not recognized the seriousness of his misconduct.

The decision states that Donald argued that he honestly didn’t believe he’d learned any material facts at the golf outing, and that this conclusion was only reached in hindsight. Instead of the bans sought by OSC staff, he argued that he be required to take the Partners, Directors and Senior Officers (PDO) course; or that he be reprimanded and promise not to act as an officer or director until he completes the PDO course.

The panel took something of a middle road, ruling that a trading ban was not warranted in this case, and that the 10-year bans sought by OSC staff “exceed that which is required to ensure that we exercise our public interest jurisdiction”. It also found that there is no evidence to suggest that there is a serious risk of future abuses by him if he is not banned from participating in the public markets. At the same time, it said that Donald’s proposed sanctions “would be patently inadequate”.

“We find that a five-year prohibition on his participation in the capital markets as a director or officer of a reporting issuer more appropriately reflects our concerns with Donald’s conduct contrary to the public interest and sufficiently addresses the protective and preventative requirements for sanctions ordered by the commission, including principles of general and specific deterrence,” it said.

It also found that costs were appropriate in this case, noting that, “Although Donald and his counsel participated in the proceedings in a responsible, informed and competent manner, we are satisfied that staff is justified in their request for costs.”

“Although staff was not successful with respect to their insider trading allegations against Donald, the facts of this matter were complex and a significant amount of time and effort was required on the part of staff to introduce the evidence necessary for the panel to reach an informed conclusion. Staff proceeded with the merits hearing efficiently and the costs requested are not excessive in the circumstances,” it concluded.