WisdomTree hits out at ‘misleading’ shareholder claims

WisdomTree hits out at ‘misleading’ shareholder claims

WisdomTree has defended itself against shareholder accusations, which the ETF manager says are "misleading" and "false".

In a statement last week (May 5), the chairperson of WisdomTree’s board Frank Salerno said shareholders ETFS Capital and Lion Point Capital "abruptly and irresponsibly" discarded a co-operation agreement, which would have avoided a proxy war.

The argument stemmed from an effort by the two shareholders to force WisdomTree’s chief executive, Jonathan Steinberg, to relinquish his role.

This spilled out publicly in April after the two shareholders released a letter to the board of WisdomTree saying the company had “squandered its credibility”.

The shareholders claimed Steinberg bore a large part of the responsibility for the company’s underperformance and ‘staggering" loss in market share, calling him "the CEO who has presided over multiple years of value destruction and subpar returns".

Then, on May 4, ETFS and Lion Point wrote to the board again, saying their "genuine efforts" to work constructively with the board had been "thwarted" by Steinberg, who, they alleged, rowed back on a co-operation agreement hours before it was due to be signed, and "made clear his determination" to not make any meaningful changes.

In response, Salerno said the agreement would have been a win for all shareholders, and said negotiations had in fact been constructive.

He commented: “We were shocked that, mere hours before its planned announcement, ETFS and Lion Point abruptly and irresponsibly discarded the co-operation agreement and announced their intention to engage in a proxy fight.”

Salerno added that the negotiations had been so constructive that he had received a dinner invitation from Christian Amoruso, a partner at Lion Point, who "himself expressed confidence" in the direction WisdomTree was going.

The dispute comes after a number of years of underperformance by the ETF provider, whose share price has fallen 79 per cent since August 2015.