Share Selling Spree Preceded Trustbuddy Demise

By Ryan Weeks on Tuesday 27 October 2015

Alternative Lending

An update in the Swedish press suggests that former members of the Trustbuddy management team cashed in prior to company’s decline.

The report – which surfaced last week in the Swedish publication “Di” – suggests that former CEO Jens Glasø and Director Rune Glasø pocketed at least SEK 130m on share sales from 2012 onwards. Jens Glasø has been portrayed as the “biggest winner” in the Trustbuddy saga. The former CEO sold nearly 55 million shares at a value of SEK 92m since the close of 2012. These shares were seemingly sold through his company Jac Invest AS.

The larger part of Glasø’s holding was shipped in Q4 2013, when he sold 30m shares for an approximate price of SEK 69m, by Di’s estimations. The timing of this sale coincided with the company’s highest closing price of 2.44 kronor on 11th December 2013. Trustbuddy was then valued at close to one billion SEK, as opposed to 88m SEK when shares ceased trading on 7th October. Di reports that Glasø’s stake in the company decreased gradually from 27% in late 2012 to just 4% at the end of June 2015. Below is a 5 year view of Trustbuddy's share price from Bloomberg:

The suggestion in the local press is that Trustbuddy’s management knew that the company was doomed, that it was heading for insolvency, and that their selling of shares was therefore illegal.

Swedish police are now looking into the Trustbuddy case for evidence of embezzlement and insider trading, and the Economic Crimes Bureau (EBM) has reportedly launched a preliminary investigation.

Trustbuddy has since filed for bankruptcy, and administrators are now exploring options for recompensing the platform’s 3,500 individual lenders. Roughly SEK 44m is said to be outstanding at present. 

The Trustbuddy debacle has shaken the peer-to-peer lending space. The news has already provoked impassioned responses from a selection of industry leaders, calling for a unified effort to preserve the good reputation of the sector. Di’s findings may have made that challenge a little steeper. Read the article in full here

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