Specialist Thomas J. Verdiglione of Van Der Moolen Specialists USA watches prices on the floor of the New York Stock Exchange, 18 January, 2006, just after the opening bell. (Stan Honda/AFP/Getty Images)
VDM is an international securities trading and brokerage firm based in the Netherlands.
Regarding the assets of VDM’s investors, “Zero point zero will be left for them,” liquidator Jaap Gelderloos was reported saying in the Financial Daily.
The Dutch Investors' Association says that there are doubts about the competency and functioning of VDM management, and that the “accumulation of blunders justifies an independent investigation.”
VDM was founded in 1892 and was one of the most prestigious brokerage companies in the Netherlands. VDM used to be one of the biggest market makers on Wall Street with significant floor trading operations. But the advent of electronic trading systems has made the firm’s stockbrokers superfluous.
In 2007, the company sold off its U.S. specialist business to Lehman Brothers, according to the Wall Street Journal.
Administrators of VDM attributed the bankruptcy to “big losses in the United States, unsuccessful new initiatives like its online trading platform, decreasing revenues in connection to the financial crisis, and a cost pattern that became unprofitable,” said a press release. “Ultimately two factors have accelerated the erosion of the liquidity position at VDM—the purchase of treasury shares and the delay in the collection of (tax) claims of VDM.”
The Investors’ Association said the commencement of legal proceedings would also depend on the outcome of a shareholders meeting that will take place on Oct. 9.
“In first instance the aim is to find the truth. If the research reveals the misappropriation of funds, then the commencement of legal proceedings for claim damages might be possible,” the Association says on their Web site.
In the meantime, VDM will be liquidated and the regulators say a restart of the company is not an option.
