Company director punished for insider trading

Last year, FINMA conducted 625 investigations into various alleged violations and concluded 38 enforcement proceedings Keystone

A former board member of several Swiss industrial firms has become the first person working for a company outside the scope of the financial regulator to nevertheless be punished by it for insider trading. 

The Swiss Financial Market Supervisory Authority (FINMA) has ordered the unnamed man to turn over CHF1.4 million ($1.44 million) in personal trading profits that were obtained using insider information. He is also being investigated by Switzerland’s criminal state prosecutor.

“The insider trading case is the first of its kind in which FINMA has sanctioned an individual for regulatory breaches who was not employed by a FINMA-supervised institution,” the supervisor said in a statement on Friday.

The perpetrator “repeatedly and systematically” used confidential information he received in his role as boardroom member at “a number of well-known Swiss industrial concerns” to commit a series of insider trading offences between 2013 and 2016. 

For example, he was able to bet on the share prices of certain companies rising with the knowledge of important strategic decisions, takeovers and business results before this information was made public. He also bet on falling share prices at one company where he sat on the board.

He repeatedly flouted no-trade periods and failed to report his activities to the companies he worked for, FINMA said. The insider trader, who also had his own limited company, placed trades using information on other companies that he had gleaned from contacts.