Who is Frank Vogel?
Interesting story in Quote magazine this month on the dividend double dipping cowboy Frank Vogel. A macher with a lot of bravoure. Made a fortune for Fortis Global Securities Lending and Arbitrage (GSLA) at the turn of the century and pocketed millions of bonus as well. Was shown the door as the bank felt his kingdom inside the bank was too risky in multiple ways.
To make a long story short, the family man built his own arbitrage firm GSFS and tried to join forces with a market maker in search for credit lines and infrastructure. He started a revenue sharing agreement with Van der Moolen, and eventually agreed to sell half of his new company to VDM for a tidy sum of 43 million. Good negotiator.
Would be an understatement to say he isn’t exactly a “no comment” kind of guy. He surfaces a little bit as a victim of all financial institutions and people hating him for unknown reasons – couldn’t help thinking “Is it because I is black?“. Some nice statements from the profile in Quote:
Frank Vogel as CEO of Van der Moolen
VDM agreed to buy a stake of 49.9% in his firm GSFS – and a part of the deal was that Frank Vogel was to succeed Den Drijver as the new CEO. Can’t really picture him running a listed company, he hasn’t made any friends in the world of finance. On the other hand, nobody could perform worse than Richard den Drijver. Besides, Frank Vogel’s lawyer was already on the supervisory board (RvC). Deal was off after Hans Kroon and De Nederlandsche Bank (DNB) blocked it. After this he could see the bankruptcy coming five months before the fact, and tried to take over some parts like the former Curvalue unit. Again – DNB blocked this option. According to Frank Vogel, that is.
Frank Vogel to save VDM
Also according to Frank Vogel, the fall of VDM was avoidable as the proceeds from his trades arrived a few days before the declaration of bankruptcy in September. The whole Van der Moolen bankruptcy is a kind of legalized robbery, only executed to fill the pockets of the liquidator and the investigators – according to the man with an estimated net worth of 20 million.
Liquidators
Made a few calls to those alleged bunch of thieves, the liquidators. Situation is slightly different. First of all, Frank is messing up the dates. VDM was declared bankrupt on september 9, announcement of tax reclaim arrived a week later on September 16th. That would have saved the firm, but arrived too late.
Second, the company Van der Moolen could really have been saved by Frank Vogel, making a serious bid for the tax claims in the preceding weeks. He would have hit the jackpot too, buying the claims at a nice discount. He did not, guess he wasn’t so sure after all in about being right at the time.
It’s the liquidator’s job to receive and keep the cash from the German tax authorities, and with GSFS as the principal party they are working together for the same goal. Whether both like it or not. With all the money arriving for Frank Vogel, it would have been very kind of him to pay them some compliments – but it’s true they are only in it for the money. Liquidators replied with a smile to my questions, and don’t worry at all about the hardline quotes in Quote magazine ; “we know where we stand with Frank. He is probably terribly sorry for what he said”.
VEB
In the meantime, shareholder association VEB is going after Richard den Drijver for malpractice. See their 40 page long letter to court (pdf). Strange side note ; the VEB letter contains all private information on people supporting their claim with passports and private addresses. Including the famous Hercules, owning more than 5% of VDM shares in the last days of 2009.
Bunch of incorrect “facts” I have to say, both in Jack’s interpretation, from Frank Vogel (FV) and in terms of Quote’s investigative reporting. Poorly researched.
First it is somewhat questionable to say that FV built GSLA. Others did (Wes Pritchett, Jaap Hoff and Doug Lindsay). Only after they were kicked out did FV move up in the hierarchy of a very profitable business. You know the old saying, success has many fathers (but failure is an orphan).
The infrastructure of VDM, GSFS did not really need. Their cooperation with VDM was about VDM trading against VDM and showing the tax authorities the “long” side of those trades only. Read the Ondernemingskamer report carefully, it’s all in there! You don’t need sophisticated infrastructure for what the Dutch tax agency deemed “dividend stripping” (VDM and GSFS in Holland). Not in 1995, not in 2001 and not in 2008. Don’t believe the bullshit from FV and Quote.
The “deal” – the purchase of 50% of GSFS by VDM – wasn’t blocked by DNB. (DNB did object to Hans Kroon taking a seat on the supervisory board of VDM but that’s a different discussion.) Next to a cash payment, FV was to be paid in shares of VDM, which had been valued at an imaginary price of 4 euros for the purpose of their negotiations (this may have been a close approximation at the start of their negotiations, but most certainly not by the time the deal was announced). By the time the deal was to have taken place (2009), the shares were trading at around 1.20 euros. This means VDM would have had to issue 3.3 times as many shares to FV as they had foreseen causing huge dilution. Besides, doubt had arisen over the likelihood of success (getting money from the tax authorities, see VDM’s impairment in early 2009) and VDM had grown to think they no longer needed GSFS, that they could do this “business” by themselves. Therefore, the deal was called off. Again, read the report from the Ondernemingskamer, it’s all in there (unless you buy FV’s conspiracy theories)!
According to the liquidators (again, read the OK report), FV’s bid for the tax claims was “low” (no one would reasonably have made a high bid in light of the fact that half of any tax money received was due to GSFS and there was and is considerable as to the success). The announcement of the Curvalue tax money arrived two weeks after the bankruptcy of VDM Holding and 1 day after the bankruptcy of Curvalue itself. So the liquidators are 100% correct when they say the tax ruling would not have prevented the bankruptcy of VDM Holding. Not all creditors of VDM Holding (or Curvalue for that matter) will be paid in full, even after the provisional German tax return. So that tells you that both entities were dead men walking. Had the German tax claim been paid a bit earlier, the bankruptcy could have been postponed by a few months, but VDM was still doomed. Read the report.
FV doesn’t owe the liquidators a compliment for the German tax claim. That claim had been filed before the liquidators entered the picture. But they have certainly done their best to claim credit for it (read the OK report) and the liquidators have already spent the money before a definitive ruling from the Germans. *That* FV should be thankful for (and it may create a gigantic mess for the liquidators if the Germans decide that they want the tax money back.)
Does the Quote article also mention the 40 million euros FV later claimed from VDM for “reputational damage”. That is quite a hoot.
wie verzint deze onzin? frankie vogel heeft al 10 miljoen gevangen van die duitse van der moolen toko (ja hij wil natuurlijk nog meer). dus vanwaar de suggestie dat vogel nog niets heeft gevangen. leest niemand de faillissement-verslagen?? wat is quote toch een kutblad sinds Jort weg is. boycotten!
@EKP, a small note here.
Investigators couldn’t just sit and wait for the money from the German tax authorities – there has been en extensive investigation from the Germans with a lot of questions to be answered.
If I’m not mistaken, no money arrived in september 2008 : only the announcement it would arrive under certain conditions.
Other than that – good points!
RV, you are right, in September 2009 the liquidators only received a statement from the tax man that they would pay money to Curvalue later on (with conditions).
That money (around 32 million) was received in October 2009 (still with conditions and it may have to be returned). So by itself that could not have prevented the bankruptcy: VDM could no longer pay its bills in August and September, then you must declare the bankruptcy. The timing is unfortunate, but nothing more than a coincidence (poor FV).
By the way, Richard den Drijver used this same bullshit argument as Frank Vogel to suggest that the bankruptcy could have been avoided (and even saying that if he had not been kicked out in July 2009, the company would have flourished!). Zwart and Paardekooper squashed this argument (as repeated by me above).
Plenty of work for psychiatrists with all these nutjobs roaming the streets!
Je moet als VDM handelaar toch wel behoorlijk stom zijn om mee te werken aan tegen jezelf handelen als je weet dat ze daarmee gaan proberen de fiscus te tillen. Maar goed, “stom” en “VDM” is natuurlijk al een tautologie 😉
VEB has removed the privacy documents from their website, this morning
Proper document here: http://www.veb.net/content/Bestanden/acties/VDM/vdmverzoekschrift1aug.pdf
haha, nice headline for Monday morning Jack, trying to steal thunder from Obama ?
Wie is die nieuwe drol op RTLZ?
nobody cares …
the subject is = Frank Vogel
What the fuck happened with the AX5 expiry last friday…
Who cares about the AX5 its time for the sequel , its August and Jack need crap so roll on the VDM stories again. Lights , camera, action Sclechtbert, Onno , Dickhard , Fuckel Vogel land zee gangsters.
AX5 please, I want to know(!)
if anybody willing to summarize “40 page long letter to court” – (http://www.veb.net/content/Bestanden/pdf/acties/Verzoekschrift12juli2011.pdf) for the benefit of english readers, pls do post it here or to Jack ?
‘VDM had grown to think they no longer needed GSFS, that they could do this “business” by themselves. ‘
So did Alphabert,
’40 million euros FV later claimed from VDM for “reputational damage”. That is quite a hoot.’
FV should ask Jack for 40 mil in damages, that would be a stronger case ?
Latest rumor is dat GSFS has saved the VDM spin-off Webbtraders from going bankrupt
what I hear is that Webb traders is making money.
how much ??
If you believe WEBB-traders is making money then you probably believe the stories about those optiver guys being billionaires too.
GSFS acting as WEBB’s knight in shining armour would certainly explain WEBB having set up a branch in Frankfurt, Germany, so the German taxpayer can continue to be raped. It’s a pity for WEBB that they are already on the radar of the tax agents.
To anonymous 3:51 pm
This is just the next formal step in VEB’s litigation, the 40 page document does not contain new information if that was your question. More than a year ago the VEB asked the appropriate Dutch court that deals with enterprises (“de ondernemings kamer”, Dutch abbreviation: OK) to investigate how VDM was run between 2005 and 2009, a.k.a. the Den Drijver era. The court appointed a banker and a lawyer to do the investigation. The results of their investigation were published a few months ago and have been discussed elsewhere on this site. In short Den Drijver created a big mess and mismanaged the company into the bankruptcy. But the people who wrote that report they do not have the legal authority to explicitly say “Den Drijver is guilty” if you know what I mean, only a court can do that. So they wrote their report explaining what a mess had been made, by whom (mainly Den Drijver & Kroon) and how this led to the bankruptcy. Now the VEB copy pastes the findings in the report and formally asks the OK court to declare that there was “mismanagement” at VDM on the basis of said report. Get it? It will take a few months at least before we get a verdict. If the court declares that indeed there is mismanagement, then the VEB (acting on behalf of VDM shareholders, at least those who are represented by the VEB) as well as the liquidators (acting for the creditors) can sue those responsible (Den Drijver and Kroon) on the basis of mismanagement as observed by the OK court and seek damages / compensation.
The VEB has had varying degrees of success with similar court cases. They had their biggest success in the case of the World Online IPO, where they reached a settlement with syndicate banks Goldman Sachs and ABN to the tune of 110 million eur (a drop in the ocean compared to the 3 billion eur IPO).
What is RTLZ ?
if anybody willing to summarize “40 page long letter to court” – http://www.veb.net/content/Bestanden/acties/VDM/vdmverzoekschrift1aug.pdf for the benefit of english readers, pls do post it here or to Jack ?
‘The VEB has had varying degrees of success with similar court cases’
this is quite good summary !
”’Including the famous Hercules, owning more than 5% of VDM shares in the last days of 2009.’
Was he thinking Share Price < NetLiq for VDM ?
Hercules was just trying to scalp one cent higher.
how much he loose on that -ve scalp ?
haha, if you have millions at mercy of the german tax collector, i am sure there be few concerned citizens at webb,
Zit Thijs Booi nog bij Web ?
well looks like the market is going to tank hard again on monday with the yankees getting downgraded. let the good times roll
Jan Thijs bedoel je, die zit inderdaad bij webb, samen met mister faillissement runt hij daar de zaak naar behoren
2050 @ 2100 FESX opening market
i’ll buy that, you are selling at 11% down from Friday close ??!
I’ll buy 2100. And 2200. New market 2250 – 2300.
(close was 2375)
2275 bid
i’ll buy 2300. new market 2320 – 2360
10 o clock close was 2420.
s&p futures opened 2.5% down in tky open .. in line with expectations really ..
by that metric 2350 as theo is not bad starting point
is the downgrade not a major event ? Or was it already priced in with last weeks downticks.
I think the market reaction to the news is a little too subtle.
Any other thoughts ?
The whole week the talk wasn’t about whether S&P would downgrade, but when. So no, it’s not a major event if you ask me.
I hope justice will be done in the VDM case and the “guilty ones” will be punished. Clear case imho! Shame a company that was ahead of competition in optiontrading in the mid 90’s (computer models, cross border vol trading, index vs individual options, etc; day to day stuff for years now, but not back then) ended this way. Not a surprise though, after completely missing the boat when screentreading was introduced around 2002 because management in those days was to busy with everything else but trading. Not to mention the mangement (or the lack of it) in the final days.
http://zoeken.rechtspraak.nl/detailpage.aspx?ljn=BX0950
Frank Vogel vs. AFM & BAFIN
‘http://zoeken.rechtspraak.nl/detailpage.aspx?ljn=BX0950
Frank Vogel vs. AFM & BAFIN’
what’s the final verdict? there seems to be lot of back n forth.