VeeDub Board Cashes In. Big-time
For a long time, European and Japanese auto execs looked longingly at their American colleagues who command princely salaries (along with a royal air force.) The times and sums, they are a-changing. Chump change we’re talking not. Porsche’s Wendelin Wiedeking and his CFO Holger Härter already come close to benchmark-setting Wagoner. But Porsche is different; after all; they’re a bank with attached sheetmetal-fabrication. Now, it’s raining money on the leaders of Porsche’s takeover target, Volkswagen. The Financial Times learned that “Volkswagen’s five executive board members made $31.7m selling shares in the middle of a controversial share spike at Europe’s largest car maker.” They were not alone.
Volkswagen announced that “large parts of the workforce” sold shares from VW’s options program, and together “collected a three-digit million euros sum.” To deflect criticism, the five execs quickly announced that they would donate 10 percent of their sudden windfall to charity. The Bürgerstiftung in Wolfsburg helps children in need, and only a battalion of Scrooges will deny them $3m before Christmas. (A call to my German CPA revealed that donations to charitable organizations are tax-deductible.)
To cash in on the sudden spike of the VW share required some nimble dealing. In the US, transactions like these would attract the SEC’s insider trading squad, but this is Germany. Bafin, the German securities watchdog, had launched an investigation last month. But since then, no growling, barking, or even excited tail-wagging has been reported. And an entire workforce that received hundreds of millions should have a benign view of those who just made them richer.
Geotpf on Dec 05, 2008
I don't even think insider trading charges would be appropiate, even if US security laws applied in this case. Insider trading requires insider information. That simply wasn't the case here. This was a supply/demand thing-Porsche was buying all of VW's shares, stupid hedge funds needed those shares to cover their retarded short positions, so everybody who owned shares in VW would be stupid not to sell. This was all very public, and involved no insider information. I don't see anything legally, morally, or ethically wrong with any part of this situation. The only losers were a bunch of rich morons who should have known better (one has to be quite rich to have money invested in the type of funds that lost money here).
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