Toto Wolff and the Mercedes Formula 1 team are used to being at the top. Frankly, the team is damn near unbeatable and has been for a while. This dominance on track comes with financial gains off track. For example, team boss and CEO Toto Wolff is worth right around $400 to $500 million. Did Mercedes Formula 1 boss Wolff get there not just through blood, sweat, and tears, but through some less than legitimate means as well?
Insider trading at Aston Martin
Before I start, it’s only ethical to state that I owned shares of Aston Martin (ARGGY, AML). However, I have since sold said shares as of June 2021. Now that we have that out of the way, let’s get to it. Le Journal de Montreal recently brought forth a report by the UK’s Financial Conduct Authority that alleges that Mercedes Formula 1 boss Toto Wolff has been accused of insider trading.
Basically, that means that a party knew confidential information about a stock (AML) and made trades of said stock because of that confidential information. In this case, the report alleges that both Toto Wolff and Lawrence Stroll knew something about Aston stock before it was public, and that Stroll made Wolff wise to it. That confidential information was the arrival of new CEO Tobias Moers at Aston Martin. That name may sound unfamiliar, but Moers is a staple in the industry.
Does Toto Wolff have a vested interest in Aston Martin?
Prior to his new position at Aston, Moers was over at Daimler AG (Mercedes-Benz AMG, specifically). He is a massive part of the success of the Mercedes AMG brand as we know it. This came after the big Aston Martin/Mercedes engine deal. Now here’s where it gets interesting. Journal de Montreal says that Wolff acquired a .95% (roughly $36 million) stake in Aston in April 2020. Later, Aston shares shot up in value.
In summary, it has been alleged that Toto Wolff, via Lawrence Stroll, knew about Moers upcoming move to CEO at Aston, and bought shares because of it. Given Moers reputation, it’s possible Wolff made the bet that shares would rise after his appointment. That’s how it allegedly worked on the inside track. Now, let’s talk about how it works for the rest of us.
Both Stroll and Wolff could be in real trouble
I heard the same news in May of 2020, via this article at Car and Driver. Thinking the same thing as Wolff, I bought some shares. I did alright, making some modest gains of a few hundred dollars, largely because Aston is valued at less on the U.S stock market. Wolff? He made millions. Granted, Wolff had much more capital to put into the stock, but the rate of return is what counts. In April last year, AML was worth EUR $1401. Now, it’s worth EUR $1962. If you multiply that by Wolff’s stakes in the company, and Stroll’s, there’s a lot of zeros.
Journal de Montreal asked Bradley Lord, Mercedes F1’s head of communications if Wolff knew. Of course, Lord said he didn’t saying “We are not aware of any such action.” For now, we’ll have to wait and see if Mercedes’ potential championship win will be dampened by any legal trouble when the UK’s Financial Conduct Authority concludes their investigation.