Ex-football execs charged with stock manipulation

Former club owner is among those accused of using company funds to purchase its own shares to bolster the value of his own personal holding ahead of a sale

Flemming ’Don Ø’ Østergaard and Jørgen Glistrup, two former heads of Parken Sport & Entertainment (PS&E), the owner of FC Copenhagen football club, have been charged with stock price manipulation in 2008.

The police's fraud squad, Bagmandspolitiet, believes that the pair artificially inflated PS&E’s stocks by using company funds to purchase its own shares between 2007 and 2008, before they sold their own holdings in the company for handsome profits.

“We believe that this is a very serious case, not just because of the high amounts of money involved, but also because of the proportions,” Henrik Helmer Steen, a spokesperson for Bagmandspolitiet, told the tabloid Ekstra Bladet. “The case includes stock purchases of 113 million kroner, so it’s no joke.”

Pair face four years in prison
The former heads of PS&E – the owners of FC Copenhagen and Parken Stadium – and their brokers, the bank FIH Erhvervsbank, have also been charged, as have two other people, whose names are protected via a publication ban.

Østergaard and Glistrup both face up to four years in prison and could be forced to pay back the 17.7 million kroner that they earned when they sold their PS&E shares in 2008.

Bagmandspolitiet maintains that if PS&E hadn't purchased its own shares, the stock would have been virtually worthless when Østergaard and Glistrup sold their shares – a claim that Østergaard refutes.

“I could have very easily sold off six months earlier, and then I would have made twice what I did," Østergaard sarcastically told Jyllands-Posten newspaper. "If anyone thinks that I was the only person in Denmark or the world who knew that a financial crisis was on the way, then fine. I guess I have some skills that no-one else has.”

A smear campaign
Glistrup also maintains his innocence in the case. Through his lawyer, Karoly Nemeth, he stated that he couldn’t understand the police charges and felt that he has been the victim of a police smear campaign.

“Jørgen Glistrup cannot plead guilty and rejects the authority’s interpretation of the case,” Nemeth told Ekstra Bladet. "It has been difficult for Jørgen Glistrup and his defence to convey the relevant opinions to Bagmandspolitiet because the employee who handled the case was manipulative, insinuating and lacked any comprehension of the case.”

According to Ekstra Bladet this morning, Bagmandspolitiet are in possession of some incriminating recordings that will play a key role in the case. They reportedly involve Østergaard and Glistrup purchasing stock on their phones.

Fact Box

A time frame of the case:

2008 – In the first nine months of 2008, PS&E buys 265 million kroner of its own stock. Several experts say they suspect stock price manipulation.

16 August 2010 – The Danish financial authority, Finanstilsynet, reports PS&E to the police for illicit stock price manipulation, based on PS&E buying about 117,000 of its own stocks between 2007 and 2008.

30 August 2011 – The police charge PS&E with stock price manipulation and begin investigating the affairs of Østergaard, Glistrup and current company head Anders Hørsholt.

7 November 2013 – After more than three years of investigations, the police charge Østergaard and Glistrup with stock price manipulation. Both men plead not guilty.