Swiss perspectives in 10 languages

Ebner cleared of insider trading

Ebner outside the Zurich court building Keystone

Swiss financier Martin Ebner has been acquitted of insider trading by the district court in Zurich.

Ebner, a former stock market high-flyer, was accused of receiving insider information in 1998 about the Italian tyre giant, Pirelli.

After being cleared by the court, Ebner, who always denied any wrongdoing, admitted he was “very relieved”.

“There is a saying that being right and getting justice are two different things,” he said.

“There was always uncertainty. I always knew personally that I did nothing wrong, but the court had to believe me and this question was open until now.”

Zurich prosecutors had been pursuing him ever since a former employee at his investment bank, the BZ Group, reported him for insider dealing at the end of 2000.

Ebner was alleged to have received information from Pirelli’s management about a planned restructuring and share buyback scheme.

At the time, the tyre company – of which Ebner’s bank was a shareholder – was preparing to merge with a parent firm.

Although Ebner actually lost money when he traded the shares, prosecutors maintained he had attempted to illegally enrich himself. But the court accepted Ebner’s assertion that this had not been the case.

The big fall

The court case marked another low point in Ebner’s recent career.

After building a formidable reputation in the 1990s as a corporate dealmaker and shareholder activist, Ebner’s fortunes turned.

The three-year stock market collapse pushed his bank heavily into debt, forcing it to sell equities in order to cover investment borrowings.

Ebner told the court on Wednesday that his taxable wealth had shrunk from a peak of SFr5 billion ($3.68 billion) down to SFr100 million.

Ebner’s fall has also fuelled a political backlash.

Last week Rudolf Strahm, a Social Democrat parliamentarian, called for Ebner to be banned from running businesses in Switzerland.

Toothless tiger

The Ebner case has also drawn attention to the effectiveness of Switzerland’s insider trading laws, which critics say are too weak to prevent abuses.

In canton Zurich, where most of the country’s financial institutions are based, some 50 investigations of insider trading have been launched since 1996.

Of these, only two have actually reached the courtroom, both of which were dismissed; six are still pending.

“No one in Switzerland has any doubt that the insider law is a toothless tiger,” said the Zurich-based “NZZ am Sonntag” newspaper recently.

Reform push

Moves are currently underway to tighten Switzerland’s insider trading legislation, although they are unlikely to take effect prior to 2007.

They include a plan to redefine whether majority shareholders should be considered “insiders” – a crucial issue in the Ebner case.

Reformers also want to broaden the range of corporate activities potentially subject to insider trading violations.

Currently, the law excludes market-moving events such as the issuing of company profit warnings.

Urs Roth, chief executive of the Swiss Bankers Association, told swissinfo that the issue needed to be addressed.

“Clearly the financial market and the person on the street believe, and are clearly right in believing, that any misuse of corporate information should be subject to penalty,” he said.

“So why are we so inefficient? It is because the law is flawed.”

“When it comes to the prosecutor, they say ‘if it’s not a capital transaction we cannot do anything about it’.”

swissinfo, Jacob Greber in Zurich

The court fully vindicated Ebner and even suggested that the case should never have been brought to trial.

Ebner actually lost money when he traded the Pirelli shares, but the Swiss authorities maintained he had attempted to illegally enrich himself.

Ebner denied any wrongdoing.

Ebner, a champion of “shareholder value”, has seen his assets wiped out since the market crashed.

In compliance with the JTI standards

More: SWI certified by the Journalism Trust Initiative

You can find an overview of ongoing debates with our journalists here . Please join us!

If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at

SWI - a branch of Swiss Broadcasting Corporation SRG SSR

SWI - a branch of Swiss Broadcasting Corporation SRG SSR