The Amsterdam stock exchange manager Piet van Outersterp calls the top of Philips at the end of the eighties. He suspects that analysts have received more information than the ordinary investor. Van Outersterp is a commissioner for the listing and chief arbitrator of the share trade. He asks an employee at Beursplein 5 to witness his telephone conversation with Eindhoven.
“Your boss, curly hair,” he barks at the secretary of Philips CEO Cor van der Klugt. To her response – “I have no curls” – Van Outersterp replies: “Every woman has curls.” A little later, Van der Klugt calls, who wants to protest against the treatment of his secretary. Van Outersterp bluffs him. “Listen carefully, Van der Klugt, if you tell analysts something that you don’t tell me, I’ll kick you off the stock exchange with the whole bunch. Is that clear?”
After the supervisor has thrown up the horn, so the author and Volkskrantcolumnist Peter de Waard calls the boss of Philips back himself and apologizes.
The anecdote out The secret of Beursplein 5 illustrates the “army mentality” of those years in the male stock market. With Van der Klugt’s earwashing, De Waard also aptly demonstrates the informal way in which the rules of the game for fair trading were enforced.
At the same time, Van Outersterp’s swearing cannonade shows the increased self-confidence in the stock exchange building. In the 1970s – the book describes the stock market developments in the past fifty years – traders in their fine suits were still disapprovingly looked at as they walked from Amsterdam Central Station to the stock exchange building on Damrak. Once the money started to splash against the plinths, the confidence of the corner men and commissionaires grew and embarrassment was no longer an issue.
This is also due to the flourishing options exchange. An options trader who walks in after one gilt-edged trade buys a Ferrari and hires someone who has to keep putting coins in the parking meter in front of the door.
“The modesty of the seventies is making way for the arrogance of the eighties,” writes De Waard. If a party has gotten out of hand, merchants leave a stack of banknotes in the establishment at the end of the evening to compensate for the damage.
Insider Information Abuse
The history of the stock market reflects developments in society, where criticism of the financial world is increasing. As a result, the rules of the game become more formal. Following on from other stock exchanges, legislation will be introduced to prevent the abuse of inside information, for example. The new Securities Supervision Act replaces the Stock Exchange Act in 1988 – from 1914, please. After that, laws follow each other in rapid succession. Supervision will be in the hands of a new organization within the exchange, the Stichting Toezicht Effectenverkeer.
Numerous major and minor scandals make the news. From the insider information case involving automation company HCS (including Joep van den Nieuwenhuyzen), the notorious securities firm Nusse Brink to the turbulent IPO of World Online with Nina Brink. De Waard describes it beautifully and often in great detail.
Operation Clickfonds seems to be snowed under in the book. In 1997, the judiciary accused numerous traders, pension managers and entrepreneurs of criminal acts. For weeks, raids and arrests dominated the news: the mixing of the underworld with the upper world seemed to be a fact. However, the case largely bled to death, and De Waard rightly concludes that justice had overshot itself in a terrible way.
The consequences were major, not only for the damaged people involved and for the Public Prosecution Service, which was criticized from all sides. The consequence was also that a few years later financial supervision was completely transferred to the government. That came into the hands of the Netherlands Authority for the Financial Markets, where Arthur Docters van Leeuwen, former head of the BVD security service, took over.
According to the author, there are “rumours” that Operation Click Fund has been so heavily instigated to give political The Hague the opportunity to take over financial control. A quarter of a century later you would like to read what has turned out to be true of those rumors.
For decades, the Amsterdam stock exchange played a major role in the media. Boudewijn baron van Ittersum was a familiar face as boss of the stock trade, while former minister Tjerk Westerterp, as chief of the Options Exchange, barely The Telegraph was to be thrown away. There is hardly anything left of that role of the stock exchange. Who knows the current chairman of the board of Euronext Amsterdam?
There are enough causes for this decline, if only because the securities trade has lost its national character. The automation makes it possible for 80 percent of the trade in Amsterdam to come from the United States and the United Kingdom. The rest is the work of parties from Asia and Europe. The same automation has also ensured that the images of screaming stock traders in the center of Amsterdam disappeared from the television news. Everything now happens digitally, somewhere in the cloud.
After several mergers and acquisitions, Amsterdam is now part of a collective of six European stock exchanges, in which Paris and Milan play first fiddle. The fair has become a far-from-my-bed show, notes De Waard. The days of “investors reviewing their portfolios over coffee and cake at their local bank” are long gone.
A version of this article also appeared in
the newspaper of March 11, 2023