First let’s get to the basics. Because what is insider trading, or also: inside information? A brief explanation on the website of the stock exchange watchdog AFM: “Insider trading is the use of information that has not been made public.”
Moment of action of great importance
It is prohibited to try to make a profit (or avoid a loss) based on this non-public information, the AFM writes. So the non-public information here is that he himself would be the new director.
Not that Kroes has made big profits with his shares (on the contrary, as you can see in the image below), but ‘the moment at which he bought the shares means that he traded with insider information’, says Michael van Praag, chairman of Ajax’s board of commissioners.
Kroes himself wants a test from the AFM. “The AFM can then independently judge whether or not I have acted contrary to the law and the severity of this. Naturally, I will bear the consequences.”
‘This is deadly’
Durk Veenstra, stock commentator for RTL Z, believes that Kroes acted very carelessly. “This is really amateurism at its finest. They cannot enforce this man. This is deadly.”
Veenstra cannot imagine that Kroes will get out of this. “This will lead to a conviction. He broke the law.”
Positive or negative influence does not matter
“He should not have done this as soon as he knew he would become director,” says Veenstra. This is because it concerns potentially price-sensitive information. A new director could possibly have a positive or negative influence on the price of a company.
It does not matter whether the price is influenced positively or negatively. “He really should have known this, you have to realize this if you work at a listed company.”
American practices
As far as Veenstra is concerned, Ajax is not to blame here. The club could not have imagined in advance that he might do this. “It is possible, then they would have to enforce insider knowledge more. But then they would also have to say, for example, that you are not allowed to send photos of your genitals to colleagues.”
With that last comment, Veenstra refers to Marc Overmars, the former technical director of Ajax who sent dick pics to female colleagues and was fired for it.
Could Ajax do something?
It seems impossible to discuss everything in advance. Veenstra: “Then you get American practices, such as the microwave saying that you should not put babies in it.”
A so-called background check may have brought Kroes’s business to light. This is stated by the Dutch Association of Commissioners and Directors (NCD). This is an investigation into a person’s background and past. Yet, according to NCD chairman Paul Geraeds, the question is to what extent Ajax can be blamed.
Moral leadership
According to Kroes, Ajax was indeed aware of the trade. The big question is who tells the truth, says Geraeds. But it is still unclear what signal Kroes wanted to send with the share transaction. “If you want to radiate confidence in the club, as Kroes says, you should buy those shares after you have joined, not the day before.”
According to Geraeds, the issue shows how important transparency is in business. “Certainly for a listed company. Ajax is in a period in which the club’s supervisory board has made some unfortunate decisions. Apart from the legal aspects, this is also about moral leadership from the director.”
In any case, Kroes’ action was not very useful. He sees that himself. “It wasn’t the wisest decision,” he said. For stock market commentator Veenstra that is an understatement. “He really should have thought three times.”
