A Swiss pension fund manager has denied allegations of illegal insider trading in connection with the merger of banks Swissfirst and Bellevue.This content was published on August 25, 2006 - 14:46
In a growing scandal, Jürg Maurer has been accused of profiting from the deal while acting against the interests of the Rieter industrial group's pension fund.
Maurer stated on Friday that by selling stock ahead of the merger his pension fund had benefited from the deal to the tune of SFr1.7 million ($1.3 million). He said he had not profited personally.
Maurer has come under fire from sections of the media for the size of his personal wealth and his failure to submit tax returns.
Federal and cantonal authorities are investigating why pension funds, including Rieter, sold stock ahead of the merger announced last September. Questions are being asked about who knew what about the impending deal.
It has been alleged that some fund managers at the two banks bought the stock for their personal accounts.
"I personally never owned Swissfirst shares," Maurer told a news conference and denied that he or his family had profited from the merger with Bellevue. He said his private wealth of SFr68 million resulted from stockmarket wins.
He added that he had no advance information to influence Rieter's sale of 40,000 Swissfirst shares – half of its shareholding – before the merger announcement.
On Thursday, justice officials announced that police had searched offices belonging to Zurich-based Swissfirst in connection with a criminal investigation against its CEO, Thomas Matter.
Zurich prosecutor Arno Thuerig said documents were seized during the raids which came as part of a probe into "fraud, embezzlement, improper business dealings and insider trading".
Swissfirst management announced last Friday that it was prepared to resign and sell the business prompting a big drop in the share price.
Swiss Finance Minister Hans-Rudolf Merz has said the case highlights the need to tighten insider knowledge rules. The Swiss Bankers Association has also called for more stringent regulations.
swissinfo with agencies
The Swissfirst and Bellevue banks announced their merger on September 12, 2005.
Ahead of the merger, several pension funds sold their shares in Swissfirst to the bank's chief executive, Thomas Matter.
Trading in Swissfirst shares increased dramatically at the end of last August and before the merger announcement.
Shares in Swissfirst soared by almost 50% after the merger announcement.
There are two types of insider trading – legal and illegal.
Illegal insider trading is the buying or selling of a security by insiders who possess information that is still not public. This puts insiders (people with for example confidential information about a company) in breach of their fiduciary duty.
A common misconception is that only directors and upper management can be convicted of insider trading. Anybody who has material and non-public information can commit such an act.
Insiders don't always have their hands tied. Insiders legally buy and sell stock in their own company all the time. Trading is restricted and illegal only at certain times and under certain conditions.
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