Monday, 9 March 2009

ACH - Dirty Deeds Done Dirt Cheap

If you had any doubt as to the downright dodgyness of ACH allow me to put that doubt to rest. Theirs is a tale of insider-trading, outright fraud, stock manipulation, and the launches of bogus companies. Let’s start out with a little background.

ACH Securities was founded by a bunch of Swedes, including Olof Hedengren, former CEO of Fischer Partners. He started the firm together with two colleagues from Fischer, the head of asset management, Peter ‘The Turk’ Andersson, and Dennis Carlsson. Other Fisher people who had both been fired for unauthorized trading joined them: Patric Sjölund, and Norwegian Pål Mørch (who later would become a partner in ACH with 12 percent of the company). You’ll come to realize that when someone is caught out insider trading, or doing dodgy deals, they end up in one of three places: ACH, EFG private bank, or prison. These places covet the skills only found in the dregs of the financial world.

As we know ACH were thrown out of the Stockholm market in 2004 for refusing to disclose the identities of person’s insider trading Skandia shares. However they continued to act as if nothing had happened, they had the same mostly Swedish customers, they used the same brokers, the only difference was that the Swiss Privacy laws meant that they could be even more brazen.

Soon enough a hard-core network of people like Bernhard von der Osten-Sacken, Edvin Austbø, and Norwegian financier Arne Fredly would be using ACH to do the deals that no-one else would do. We know that Osten-Sacken has been arrested. Fredly has just won a libel case against a Norwegian newspaper because they couldn’t come up with enough hard evidence for his dealings, but…just because no-one would squeal does not mean he didn’t do it.

Their deals included:

· Insider trading on a number of Electrolux trades
· Insider trading on the Findexa bid on Eniro.
· Insider trading in Gambro before the bid for medical technology company became known in April 2006
· Insider trading on SSAB's acquisition of the North American steel company Ipsco for 56 billion kronor.
· And as recently as October ’08 Arne Fredly bet 500 million on a short position in Ericsson shortly before a profit warning. Strangely, Edvin Austbø made exactly the same trade, at exactly the same time. What a co-incidence.

All these deals were done by ACH. In fact an insider there said to the Dagens Naeringsliv newspaper that they knew what their quarters’ sales were going to be even before any of the sales had happened!

Osten-Sacken was, as we’ve discussed also involved in the Allokton fraud (along with our other old pal Johan Bohman of EFG, and xG via Casper Holdings). When Police were looking to question him about the insider trading he fled – to Switzerland, where he rented a villa in Verbier. He was joined there by Andreas Forsell, the former Finance Director of Allokton, who found another job waiting. Guess where? Yep, ACH Securities!

ACH, despite being banned in Sweden, have worked hard there in the IPO’s of some fairly dodgy companies These include Central Asia Gold, Malka Oil and not least the outright scandal that is TMG International (TMGI).

They punted this company to investors, and then – here’s the nasty bit – were revealed to be responsible for huge short trades in the company from our motley crew in collusion with the owner Jostein Eikeland. The Company lost 96% of its value, and made some people even richer. Eikeland is now being investigated by the Norwegian Economic Crimes Bureau for serious fraud.

Now what is interesting about this is not the dodgy deal, but how it mirrors what could have gone on in xGT. ACH bought TMGI’s shares at a massive discount, and then sold them on the open market for ‘face value’. This is a process known as a ‘Chop-House’ trade, where one buys at literally pennies in the pound. At one stage at the end of 2005/2006 ACH was TMGI's largest shareholder with 65 million shares, that’s around a third of the company. But three months later ACH has disappeared from the shareholder register.

Where did the stock go?

They ended up registered at… SIS Segaintersettle! From there the shares were either sold, or ended up back at TMGI. In effect ACH were using SIS as an extra layer to disguise who the real physical owner of the stock is, just like a computer hacker uses as proxy terminal. It’s very difficult to find out who bought the stock and who sold it (and what chopped price they paid). And if it’s the same person doing both buying and selling then that’s more difficult to detect too…

It seems that it was common practise for ACH. The same pattern was used with Central Asia Gold, listed on the NGM Stock Exchange. [N.B. Who is a MAJOR shareholder of NGM? – Our friend Fredrik Wahlman!] In 2005, there were 50 million shares registered with ACH. Six months later, ACH has disappeared from the shareholder list. Instead, SIS Segaintersettle comes up with 90 million shares, about 40 percent of the company!

Then one looks at Malka Oil, the ‘sister company’ to Central Asia Gold: and one third of the shares end up registered at SIS. Chairman of Malka Oil is Mikhail Malyarenko. He is also a board member of Tomsk Refining with Pål Mørch, partner at ACH. (Look out for the IPO of Tomsk Refining – coming to a Chop House near you…!) Obviously the same motley Crew, with ACH, were merrily insider trading at all these companies.

Now lets remind ourselves of the situation at xG, and see is it fits the pattern:

1. Discounted ‘Chop-House’ issue? – Check!
2. Use of SIS Segaintersettle? – Check!
3. ACH holding masses of stock? – Check!
4. Insiders selling with prior knowledge of stock movements? – Check!
5. Involvement of these insider trading people? Well, we don’t know, BUT Johan Bohman, AND Fredrik Wahlman move in all the same circles…..
6. Collusion between the company’s principals and ACH? – I’ve no doubt whatsoever. Just follow the money.

Now that ACH is closed I’ll make a prediction: Most, if not all of the above names will end up connected with, or working for, EFG Private bank. They are the only other company that can truly appreciate their ‘special’ talents. EFG is owned by one of xG’s major shareholders – Johan Bohman.

No comments:

Post a Comment