friday, 24 january of 2020

Fine

Swiss regulator fines former bank boss over ‘serious’ insider trading

Switzerland’s markets watchdog has found the former chief executive of one of the country’s banks guilty of “serious” insider trading offences, ordering him to pay back SFr730,000 ($752,000) in illegal profits.

Finma did not disclose the name of the individual concerned in announcing the action on Friday morning.

“During his time in office as an executive board member or as CEO he executed transactions through deposit accounts held in his wife’s name at other banks and thus violated the bank’s internal directives,” the regulator said in a statement.

The chief executive had “repeatedly and systematically” violated supervisory law, it added, citing instances of insider trading.

The individual used his wife’s account to trade on sensitive market information on client companies of the bank he gained access to in his position.

“Besides conducting insider trading the person concerned systematically breached the bank’s internal directives as well as directives recognised by Finma as a minimum standard over a period of many years through other private trading activities,” Finma said.

As well as the confiscation order, Finma — which does not have the authority to make criminal charges — has issued a four year ban on the individual concerned to undertake any management role in finance and a six year ban on his licence as a securities dealer.

The regulator is known for its discreet policing of Switzerland’s finance sector. Interventions to ensure compliance are usually undertaken in private. Cases are publicised only in exceptional circumstances, and individuals, even when enforcement actions are made openly, are often left unnamed. The approach is not without its critics, who argue it perpetuates an unhealthy culture of cover-up and secrecy in Swiss finance.

Patric Eymann, head of Finma’s enforcement division, said: “Insider trading undermines confidence in the market. We will therefore continue to rigorously investigate any evidence of violations of supervisory law.”

(Published by Financial Times, January 24, 2020)
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