Convicted of Insider Trading, FPC Chairman Steps Down

“For his part, Carlström is maintaining his innocence, and has noted that he made a loss on the trades in question.”

Johan Carlström’s years-old legal troubles have finally caught up with him, and as a result, he is leaving his position as Fingerprint Cards‘ Chairman of the Board. And unless he is successful in a legal appeal, he will be going to prison.

One of the most consequential figures in FPC’s history, Carlström served as the company’s CEO from 2009 to 2015, before moving on to a role as a Business Developer for the biometrics specialist – a position he left in 2016, when he explained that outside entrepreneurial efforts were taking up too much of his attention.

Carlström made his dramatic return to the company as its new Board Chairman in 2018, assuming the role as multiple board members declined re-election. It would turn out to be a position from which Carlström could wield considerable power: in 2021, at his direction, the board of directors announced the launch of a strategic review of the company that could potentially entail sales, spinoffs, acquisitions, or other maneuvers aimed at maximizing shareholder value.

Ultimately, the review determined that Fingerprint Cards should be split into two subsidiaries, a change that took effect at the start of this year. One of them, called “Fingerprint Technology Company”, would be based in Shanghai and focused on mobile biometrics, while “Fingerprint Cards Switzerland” would explore opportunities in payments and access control.

His alleged insider trading activities are thought to have occurred between 2012 and 2014, but the legal process has been protracted, with the trial being postponed several times, according to Expressen. Now, however, it has concluded, with the Stockhold District Court finding that Carlström traded large amounts of FPC securities shortly before the publication of press releases announcing the company’s business developments. One of the press releases concerned another company’s inclusion of Fingerprint Cards’ biometric fingerprint sensors in a new smartphone.

For these crimes, Carlström has been sentenced to one and a half years in prison.

For his part, Carlström is maintaining his innocence, and has noted that he made a loss on the trades in question. He was acquitted on some of the charges, and his legal team has indicated that it will appeal the overall verdict. The prosecutor, meanwhile, plans to appeal what he believes to be erroneous acquittals, Expressen reports.

In any case, Carlström is leaving Fingerprint Cards.

“I note with great surprise and disappointment that the Stockholm District Court has come to a conclusion that I and my lawyers believe is incorrect,” he commented in a statement. “However, in light of the District Court’s ruling, and with the company’s best interests in mind, I have decided to leave the board of Fingerprint Cards AB.”

Carlström will be replaced as Board Chairman by Dimitrij Titov, who emphasized that the board’s work “continues uninterrupted”. That having been said, the board plans to call an extraordinary general meeting in light of these developments.

Sources: Fingerprint Cards, Expressen

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June 30, 2022 – by Alex Perala