First hits against Den Drijver and Kroon
It has been almost three and a half years since Van der Moolen went down. The company filed for bankruptcy September 10th 2009. A pity. Public trading firms burning money like VDM are thin on the ground. Their quarterly reports were juicy material.
Fast forward to 2013. The court decided what everybody has always known, it has been maladministration. Hans Kroon and Richard den Drijver ruined the firm, investigators concluded. Some members of the Supervisory Board, more specific Van den Broek and De Marez Oyens, also must have had a bad weekend.
The investigation wasn’t cheap – 435.962,05 euros. Judge decided Den Drijver and Hans Kroon will have to finance this. This is only a first hit, as the road is open for claims against them. Shareholder association VEB will be eager to take action.
You can read the full research report and court ruling over here (Dutch).
Hans Kroon may not be covered by insurance
Richard den Drijver will be fairly safe. Every management board will have an insurance policy against liability and claims. It’s a field of debate what’s covered by the insurance, incompetence is covered but outright theft isn’t – and the insurance is usually limited to a few million.
I’m an amateur in insurance law. Correct me if I’m wrong. It appears Hans Kroon is in deep trouble as the court ruled he is responsible for crashing the company. However, the man was not a member of the board. That’s an unusual situation – meaning insurance may not cover him.
First!
Any more juicy bits from the dutch transcript of court ruling?
‘It appears Hans Kroon is in deep trouble as the court ruled he is responsible for crashing the company.’
how did they conclude that?
VDM’s liability insurance “only” goes up to 25 million euros. And the insurer is likely to decline any and all claims given the nature of RDD’s behavior.
The preferred shares (which were like a loan rather than common shares) held by ASR (Fortis) alone accounted for a 32 million euro loss (why did you think ASR was so keen to team up with the VEB?) which is more than enough to wipe out the entire liability insurance and then some. So your assumption that RDD is “safe” is wrong. Full story was in Saturday’s Financieele Dagblad.
And if I may point out another typo: Van den Broek escapes just barely, since the maladministration (on the part of the supervisory board) was only observed right after he left. But Marez Oyens and James McNally (a personal friend of Den Drijver) are on the hook. They pocketed about 40k a year for their “service” on the supervisory board, now they stand to be wiped out. How’s that for a risk/return ratio?
The court ruling has so many juicy bits: RDD and Wolfswinkel drafting the letter that the RDD Foundation sent to VDM urging the company to buy back shares; RDD himself processing the share buy-back in 2008 (causing 20 cent spikes in a 3.50 euro stock! the moron only used market orders it seems); De Marez Oyens thinking that this was a good call because he thought of RDD as an “exceptionally gifted trader” (to which I can only say: De Marez O deserves being wiped out); Lenny vd Ham admitting that RDD backdated the letter that “justified” the bonus to Hans Kroon the year before (and RDD lying about it in court); there is just no end to it. I can wholeheartedly recommend reading the verdict to anyone who is curious how not to run a company.
“Richard den Drijver will be fairly save”… Save?? hillbilly journalist
Why the hell did he use market orders? Either his brain was so fucked up or he didn’t care at all?
@ 7:20pm, maybe you should learn to read Dutch or otherwise get a fucking clue.
And as for De Marez kissing Richard’s ass: he made this comment in December 2011 (which you would have known if you have taken the time to read the verdict yourself). At that point in time, there was no kissing Richard’s ass going on I can assure you. At best De Marez was trying to come up with a rationalization as to why he allowed Richard to execute the share buyback himself, something he had been aware of at the time it happened but that was clearly in violation of insider trading rules (share buyback during a lock-up period).
Please spare us your stupid questions and bullshit answers. Afgesproken?
“‘But Marez Oyens and James McNally (a personal friend of Den Drijver) are on the hook.’
why those two in particular?”
because they were the only two members of the supervisory board during the timeframe in which the court has observed maladministration *on the part of the supervisory board*. it’s that simple. have you even TRIED to read the verdict or do you need someone to explain everything to you?
‘@ 7:20pm, maybe you should learn to read Dutch or otherwise get a fucking clue.’
what’s with all the aggro fella?
‘which you would have known if you have taken the time to read the verdict yourself’
sorry buddy, little tight on time, markets you know
‘At best De Marez was trying to come up with a rationalization as to why he allowed Richard to execute the share buyback himself’
who de marez? why did he had to come up rationaliztion rather than reporting the ceo to the board? perhaps he wanted to kiss drijver’s arse?
‘Please spare us your stupid questions and bullshit answers’
listen buddy, imc is getting on your nerves, quit and you’ll feel better about your stupid meaningless existence
Afgesproken?
‘because they were the only two members of the supervisory board during the timeframe in which the court has observed maladministration’
so board had just two members? of a public listed company of that nature/size?
‘ave you even TRIED to read the verdict or do you need someone to explain everything to you?’
no, didn’t get time, you needn’t explain everything, just summary of facts would do, thx
what a bunch of retards on this blog
haha, join the party fella
“who de marez? why did he had to come up rationaliztion rather than reporting the ceo to the board? perhaps he wanted to kiss drijver’s arse?”
God you’re stupid. Den Drijver by himself *was* the (entire) executive board, that was part of the problem and cause for maladministration. and on the supervisory board, it was only De Marez and Den Drijver’s friend McNally. So exactly who should De Marez have reported Den Drijver to? Himself?
“Richard, please stop destroying this company. I’m asking you for the last time. Pretty, pretty please.”
You might want to read up on “firing” members of the SB while you are at it.
how do you mean firing members of the SB? SB is supervisory board?
There’s quite a lot of coverage here in this blog on a lot of trading firms. Anyone knows how ATG in HK is doing? Seems they’ve revamped their website. You can see the traders working really hard.
http://neo.algorithmictradinggroup.com/
have you visited their website? there is a live broadcast to their trading floor. too bad they don’t have the cams pointed at their screens 🙂
ATG was founded by ex-IMC guys, i suppose they want to honor where they came from?
why would you wannt live broadcast your own floor, anyways, i tried the ‘live’ button earlier, didn’t work possibly due to post market hours
they wanna honor their own ex-employer IMC, they have got to be the first and the last of the type?
Den Drijver by himself *was* the (entire) executive board, that was part of the problem and cause for maladministration. and on the supervisory board, it was only De Marez and Den Drijver’s friend McNally.
Den Drijver is the man in charge
‘ they have got to be the first and the last of the type?’
the first who knows, the last for sure
knows what? and why last for sure?
‘Den Drijver by himself *was* the (entire) executive board, that was part of the problem and cause for maladministration. and on the supervisory board, it was only De Marez and Den Drijver’s friend McNally.’
then the shareholders deserved it
“then the shareholders deserved it”
it’s not like vdm shareholders asked for this situation to arise. it came about because other executives (such as wolfswinkel, who was becoming too critical of den drijver) were being moved out by den drijver. meanwhile pledges to find replacements were never fulfilled. fortunately the dutch ondernemingskamer had a much more sensible approach than your naive way of thinking. for it placed the accountability firmly on the shoulders of the boards of vdm, thereby opening the door for shareholders to claim damages. it still hasn’t started to sink in with you what this verdict means, has it?
Live means always live. Not a live button. Check the times of the webcams
yes, i am seeing someone sitting currently in HK at 20:40 local time, what’s that looser upto and why do you wanna advertise that?
‘it’s not like vdm shareholders asked for this situation to arise’
yes, they didn’t ask for it, but when the time came, they should have taken action against drijver
‘fortunately the dutch ondernemingskamer had a much more sensible approach than your naive way of thinking. for it placed the accountability firmly on the shoulders of the boards of vdm, thereby opening the door for shareholders to claim damages’
so you think shareholder activism is naive way of thinking? of course all the billions made by activists like loeb, ackman, icahn are due to their naive way of thinking? of course in your eyes, more sensible would be to blame the board once the company has gone down and try to claim personal liability rather than saving and prospering the company while its still being mis-managed and with a chance to being salvaged
‘it still hasn’t started to sink in with you what this verdict means, has it?’
no, it’s rocket science to understand this verdict, so it’ll take long time for me to get my head around it, of course it’s in dutch, so i haven’t had time to go translate it first, if you wanna use your sensible way of thinking to present the main outcomes?
“but when the time came, they should have taken action against drijver”
and when was this? wolfswinkel left around aug/sept 2008 (on paper at least), following which vdm was said to be looking for a replacement. in november 2008 it was announced that frank vogel would be proposed for a board position (together with a takeover announcement of gsfs). this fell through in march 2009 when the entire gsfs ordeal was nixed. around that point in time, two new supervisory board members (zwart and paardekooper) were proposed together with hans kroon on the executive board. these nominations were indeed accepted at the agm in may 2009.
so tell me einstein, what “action” normal shareholders (you know, the ones who don’t have a significant stake such as the “activists” that you mentioned; as you undoubtedly know, the only shareholder with a significant stake in vdm at the time was den drijver) could and should have taken to even try to resolve this manner (forcibly?) in a more efficient and speedy manner. you seem to know a lot about corporate governance and shareholder activism, so please share your wisdom with us. i will give you a hint: selling their shares to some poor other schmuck by itself would not have solved this situation (but it would have been wise).
oh and btw, the veb (that’s the association that propagates shareholders rights in Holland that won this case against vdm at the ondernemingskamer) alerted the company and its ceo to its deficient corporate structure at every shareholders meeting. yet the veb did not take the “action” that you speak of. i for one consider the veb to be activists. i will leave it to you to wonder if the veb didn’t take such “action” because (a) you’re a fucking moron who makes up shit or (b) because they are stupid and lazy. my money is on (a).
‘and when was this?’
all the time, you are the owner, you act like one, all the time
‘wolfswinkel left around aug/sept 2008 (on paper at least), following which vdm was said to be looking for a replacement. in november 2008 it was announced that frank vogel would be proposed for a board position (together with a takeover announcement of gsfs).’
so from aug/sep till nov, there was no board?
‘this fell through in march 2009 when the entire gsfs ordeal was nixed.’
who was in the board from nov to march?
‘around that point in time, two new supervisory board members (zwart and paardekooper) were proposed together with hans kroon on the executive board. these nominations were indeed accepted at the agm in may 2009.’
so who was on the board from march to may?
‘so tell me einstein, what “action” normal shareholders (you know, the ones who don’t have a significant stake such as the “activists” that you mentioned;’
sell the stock?
‘as you undoubtedly know, the only shareholder with a significant stake in vdm at the time was den drijver) could and should have taken to even try to resolve this manner (forcibly?) in a more efficient and speedy manner.’
so the large shareholder along with management suffered, that sounds all right then
‘you seem to know a lot about corporate governance and shareholder activism, so please share your wisdom with us’
you don’t need no big books to read about corporate goverance and shareholder activism, just put yourself in the shoes of an owner of a business and you’ll start seeing when your business/management starts hurting ‘your profits’
‘i will give you a hint: selling their shares to some poor other schmuck by itself would not have solved this situation (but it would have been wise)’
that is a brilliant hint, which of course is obvious, if you don’t want to stop your business/management from hurting your profits, you get out of that business and give it to the highest bidder
‘oh and btw, the veb (that’s the association that propagates shareholders rights in Holland that won this case against vdm at the ondernemingskamer) alerted the company and its ceo to its deficient corporate structure at every shareholders meeting’
what do you mean alerted? is that all they can do, alert? what about a bloody lawsuit? apple got their arses sued for just trying to sneak in no prefs with another shareholder vote
‘yet the veb did not take the “action” that you speak of.’
why not?
‘i for one consider the veb to be activists’
i am not talking about european version of activism, alerting in morning and then going for beer in the afternoon
‘i will leave it to you to wonder if the veb didn’t take such “action” ‘
yes, they alerted and the company went down, nice job
‘because (a) you’re a fucking moron who makes up shit or (b) because they are stupid and lazy. my money is on (a).’
calm down mate, no need to get all worked up, did you loose money as shareholder that you are now taking all the finger pointing to shareholders ‘personally’ for not acting as real owners of the business?
yes we know you’re an ignorant american. we’ve established that a long time ago. “yah”
how many times do we have to break down the names of those on the executive (1 person) and supervisory (2 persons) boards of vdm between 2008 and 2009? hello?!?!
for the love of god man, read the verdict and get yourself acquainted with the case at hand.
“what about a bloody lawsuit?”
let’s see: the company nominates new candidates for shareholder approval in two months time, so you want to bring on a lawsuit in the meantime, because you are going to get a quicker verdict and the court is going to appoint new / other executives at your request even though you represent only 0.000087% ownership of the company? if that’s the american way of doing business then i prefer the european.
anyone say RIO Trade!!
money was rinsed in the swiss alps
what money? what RIO Trade?
RIO – one way baby
‘yes we know you’re an ignorant american. we’ve established that a long time ago. “yah”’
you lazy europeans, anyone saying yah is clearly an ignorant american, well done, that was a whole day’s work for you, isn’t it?
‘how many times do we have to break down the names of those on the executive (1 person) and supervisory (2 persons) boards of vdm between 2008 and 2009? hello?!?!’
didn’t you read the bloody questions – you have to break it down for aug-nov-mar-may, for all those periods, do you go to sleep while reading the god damm post?
‘for the love of god man, read the verdict and get yourself acquainted with the case at hand.’
well, you clearly seem to have read the verdict, care to comment on anything new that is already not known?
‘“what about a bloody lawsuit?”
let’s see: the company nominates new candidates for shareholder approval in two months time, so you want to bring on a lawsuit in the meantime, because you are going to get a quicker verdict and the court is going to appoint new / other executives at your request even though you represent only 0.000087% ownership of the company? if that’s the american way of doing business then i prefer the european’
that ain’t no american way, did you read the god damm post, there is an alternative if you don’t want to do the hard work of owning a business, selling out if you can’t devote the time, otherwise the managers are going to run it into ground. Sending stupid alerts and going for afternoon seista is not going to cut the stupid cheese, if that’s the european way of business, what i am saying, it of course is.
‘RIO – one way baby’
you guys talking about rio tinto>?
or rio de janeiro?
“didn’t you read the bloody questions – you have to break it down for aug-nov-mar-may, for all those periods ”
it’s the same answer for all those periods!?! earth to yankee boy?!? and guess what, those three persons have now been made accountable.
“there is an alternative if you don’t want to do the hard work of owning a business”
look i’m sorry that i’m so stupid that i can’t understand your american logic. please try to explain to me in the most simple terms how a minority shareholder (< 5%) who doesn't have a multi-billion warchest behind him like an icahn does, can exercise power and influence and force decisions in the company that he's a shareholder of? this is a very relevant question for the large majority of people who own shares of publicly traded companies. you keep implying that they can. ("sell your shares" is not an answer, because the person who buys them ends up in the same position.)
so before you criticize the veb and run your big mouth (as americans are wont to do) about shareholders getting what they deserve, and what a big swinging dick you are, answer this simple question.
‘it’s the same answer for all those periods!?!’
how can it be same answer if
‘wolfswinkel left around aug/sept 2008’
‘n november 2008 it was announced that frank vogel would be proposed for a board position’
‘this fell through in march 2009 when the entire gsfs ordeal was nixed.’
‘around that point in time, two new supervisory board members (zwart and paardekooper) were proposed together with hans kroon on the executive board. these nominations were indeed accepted at the agm in may 2009’
earth to euro trash?!?
‘and guess what, those three persons have now been made accountable’
yes, right about time, 5 years is fair enough time, in euro land of course
‘look i’m sorry that i’m so stupid that i can’t understand your american logic’
yes, i am sorry that you can’t understand simple fact that not everybody using ‘yah’ is american
‘please try to explain to me in the most simple terms how a minority shareholder (< 5%) who doesn't have a multi-billion warchest behind him like an icahn does, can exercise power and influence and force decisions in the company that he's a shareholder of?'
how many times have i repeated – sell off your holdings if you don't want to act like an owner, you hard of hearing/reading, what?
'"sell your shares" is not an answer, because the person who buys them ends up in the same position'
haha, there's your problem, euro boy, distressed guys will buy it, at the right price, just like they brought greek bonds and something would be done to extract the value off it, if there ain't, then why is anybody buying it? businesses go bankrupt all the time, stupid management can't be blamed if the owners didn't hack them in time
'so before you criticize the veb'
for alerting in morning and going for beer at lunch time?
'and run your big mouth (as americans are wont to do)'
okay, let's try one more time, what is making you so convinced about the whole yank obsession, use of word 'yah', that's it, the author has to be american?
'about shareholders getting what they deserve'
they deserved the price they got when they sold the business, filing a lawsuit against management for being stupid ain't going to get anywhere
'and what a big swinging dick you are, answer this simple question'
sell off your business if you don't want to like an owner?
this is just so typical of euro socialism, do no work, take no blame and if somebody fucks up, then scapegoat him for all the fault in the world, how about taking an ownership and being a step ahead of the crisis rather trying to find a sacpegoat for all your problems, blaming hedge funds for periphery bonds sell-off was another fine eg of this euro ass lazziness
Is there a WikiLeaks Bonus Edition? Companies are reporting bonuses. Are there leaks in terms of amounts paid, to what individuals. Would be entertaining if people want to start posting this information.
make a market and if the offer ain’t high enough, then stop having an orgasm and go back to your mama
loser. one o.
kroon and den drivjver are innocent
they are fruit juice juicy
remind me of gekko
nice 2 boys – kroon and den drijver
just misunderstood
ahead of their time
and really here to save the world
haha, you are so funny, with your sarcasm
so in your opinion from this report what was the pivotal time/decision for VDM to go down (sorry I don’t know Dutch)… thanks
an article on the herbalife options trade by carl Icahn would be more interesting than VDM don’t you think?
Don’t know if any “european” market maker is on the other side of his trades?
Thanks JACK!
@7:20pm: I must beg to differ. Icahn is a dead man walking. The vdm discussion on the other hand is very much alive.
@8:07pm: Thank you for demonstrating once more your complete and utter lack of knowledge of what went down at VDM and what killed it. It wasn’t a “sudden bump in the mm sector” in 2009 (VDM’s trading operations continued to be profitable into 2009 thank you very much, as evidenced by bonuses being paid out after the bankruptcy). It was Den Drijver blowing so much money on share buy-backs, Online Trader, handing out multi-million euro loans to Hans Kroon’s family at Avalon etcetera. He was burning money even faster than the FED can print! This guy would find a way to ruin any company that you could think of if he were put in charge.
‘Icahn is a dead man walking. ‘
how did you conclude that?
‘Thank you for demonstrating once more your complete and utter lack of knowledge of what went down at VDM and what killed it.’
you are welcome, you get an orgasm from pissing off on random people?
‘It wasn’t a “sudden bump in the mm sector” in 2009’
really, so 2009 wasn’t a complete opposite to 2008 for most mm, it wasn’t that long ago that you forgot abt it already?
‘(VDM’s trading operations continued to be profitable into 2009 thank you very much, as evidenced by bonuses being paid out after the bankruptcy).’
how much was the pnl for 2009, clearly the level of bonus demonstrates earning for calendar 2009
‘It was Den Drijver blowing so much money on share buy-backs, Online Trader, handing out multi-million euro loans to Hans Kroon’s family at Avalon etcetera. He was burning money even faster than the FED can print! This guy would find a way to ruin any company that you could think of if he were put in charge.’
yes, this was what i was implying, years of mis-management could be supported by vdm’s excess profits, but once this excess profits disappeared, note the word excess, running a trading business without cushion is calling for disaster one step away, if they could fund for another month they would have had cash on way from the germans?
“yes, this was what i was implying, years of mis-management could be supported by vdm’s excess profits, but once this excess profits disappeared, note the word excess, running a trading business without cushion is calling for disaster one step away”
Excess profits arose only from their US Specialists business. And those dried up in 2004, LONG before Den Drijver entered the picture. In fact, in 2007 for example (with Den Drijver in charge), the US operations lost around USD 80m. In the period 2003-2007 a whopping quarter of a billion. Excessive? Yes. Profits? No! (Not surprisingly, VDM reported a loss during each year that Den Drijver was the CEO.) For you to suggest that there was also mismanagement before 2008 (= US Specialist) but that it was then somehow masked by excess “profits” is a misrepresentation. The court ruling also specifically speaks of activities undertaken in 2008 and beyond as cause for the mismanagement (e.g. share buyback, termination of Online Trader, loan to Avalon).
“if they could fund for another month they would have had cash on way from the germans?”
No. The tax money from Germany was provisional at the time, i.e. VDM would not have been allowed to spend it in light of the investigation that was announced by the German tax authorities (it would take another two years for the tax return to become final). But Den Drijver had used *exactly* the same reasoning in his legal defense to argue that the bankruptcy had been unnecessary and that his successors (Zwart/Paardekoper) were to blame for the demise of VDM. Needless to say, the court didn’t buy into that. What does this say about you?