Swiss Financial Regulator Pledges Crackdown on Individuals

Oct. 30 (Bloomberg) — Switzerland’s financial services watchdog pledged to crack down on individuals suspected of misconduct, abandoning what its director called a historical “reluctance” to target people rather than institutions.

“Individuals need to know that they have something to lose,” Mark Branson, the head of the Swiss Financial Market Supervisory Authority, or Finma, said today in a speech in Geneva. “Deterrence by sanctioning institutions does not seem to be having the desired effect.”

The comments could be a clue to how Swiss authorities plan to prosecute a currency-rigging investigation that has widened to include several global banks. Finma is among authorities worldwide investigating allegations bank traders tried to rig currency markets. In both the U.S. and U.K., investigators probing the manipulation allegations are looking at both individuals and banks.

“Our message is: if you try you will be caught, and if you are caught, your career will not be the same afterward,” Branson said.

While the regulator hasn’t identified the targets of its currency-rigging inquiry, the Swiss Competition Commission has said it’s looking into eight banks — including Credit Suisse Group AG and UBS AG, both firms where British-born Branson worked before joining Finma in 2010.

Credit Suisse said the commission’s March statement contains unspecified “incorrect references” that hurt its reputation. Credit Suisse and UBS have said they’re cooperating with investigators.

UBS has set aside 1.84 billion Swiss francs ($1.94 billion) for legal costs including the currency-manipulation probe, the Zurich-based lender said earlier this week. It also said it’s in talks with antitrust and criminal authorities at the U.S. Justice Department regarding that investigation. It may be the first bank to reach a settlement on foreign exchange with the Justice Department, according to a person briefed on the matter who asked not to be named because the talks are confidential. UBS is also among the firms in talks with the U.K. Financial Conduct Authority to settle that regulator’s currency-rigging probe as soon as next month, people familiar with the probes have said.

While Finma cannot fine companies or people, it can suspend them from Swiss financial markets for up to five years and seize profits. The regulator has already begun to step up its efforts and has sanctioned 111 companies and 118 individuals in 2013, more than double in 2011.

Finma yesterday said it banned Andreas Waespi, the former chief executive officer of Bank Coop AG, from managerial positions for three years after finding that the bank repeatedly bought its own shares to prop up their price over a four-year period. Waespi resigned as chairman of asset manager Swisscanto Holding AG in reponse to the ban, which he said was “disproportionate and incomprehensible.”

“The cooperation between regulators across the globe is seamless as never before,” Branson said, referring to the investigation into currency rigging.

“There is simply no hiding place.”

–With assistance from Jan-Henrik Förster in Zurich.

To contact the reporters on this story: Hugo Miller in Geneva at [e-mail]; Giles Broom in Geneva at [e-mail] To contact the editors responsible for this story: Heather Smith at [e-mail]; Mark Bentley at [e-mail] Cindy Roberts