SWITZERLAND - Publica, the CHF30bn (€19bn) pension fund for Swiss federal employees, says an external auditor's report has cleared its employees of any wrongdoing in the Swissfirst affair.

Publica has become embroiled in the affair after it emerged that it had dumped shares in Swissfirst just before a merger with another bank in September 2005.

An investigation was launched by Swiss authorities last August to determine whether Publica and six other schemes were involved in an insider trading scandal.

But Publica said: "According to a report by BDO Visura, there is no evidence that employees violated any laws or internal rules in trading Swissfirst shares."

"In particular, there are no indications that employees who were involved in the decision-making personally profited from the share trades," it added. The personal bank accounts of Publica's employees were scrutinised as part of the auditor's probe.

Publica also reiterated that it had not been contacted by anyone at Swissfirst prior to the bank's merger.

The scheme has previously said that if had known about the merger, it would not have sold 68,100 shares in Swissfirst for CHF57.5 on September 7 - four days before the merger announcement. It insists that the decision to sell its remaining holding in Swissfirst was taken in early 2005.

On the day of the announcement, Swissfirst shares jumped to CHF73.5, meaning Publica sacrificed a potential gain of around CHF1m.

Publica is the second of the seven schemes connected with the Swissfirst affair to say it has been vindicated by an external report.

Recently, Ist-Investmentstiftung, a CHF8.3bn fund targeted to public sector employees, said a probe by Ernst & Young found no evidence of any wrongdoing amid the scheme's Swissfirst's equity trades.