SWITZERLAND - Thomas Matter, chief executive of Swiss bank Swissfirst, has dismissed allegations that he and five Swiss pension funds may have been involved in insider trading from which he benefited.
The NZZ am Sonntag newspaper recently reported that the funds (Pensionskassen) sold their shareholdings in Swissfirst in September 2005 - shortly before the bank announced a merger with peer Bellevue. News of the merger prompted a rally in shares of Swissfirst.
The NZZ am Sonntag claimed that by selling their shares prior to the merger, the five Pensionskassen and two Swiss insurers sacrificed a potential gain of CHF20m (€12.6m) while Matter got CHF50m richer.
The newspaper alleged that Matter may have persuaded the investors to sell their shares to him prior to the merger. This is being looked into by Swiss regulators.
But Matter flatly denied the allegation today. "There were no incentives given to the pension funds or their representatives. Each investor was completely free to decide whether he wanted to sell shares in the bank and if so, how many," he told Switzerland's Handelszeitung.
Matter even said the investors were aware that some sort of strategic partnership would emerge between Swissfirst and Bellevue, "though owing to Swiss laws prohibiting insider trading, I was not permitted to explain to them the deal in detail".
The CEO added that the rally in Swissfirst shares following the merger announcement "took us completely by surprise".
The NZZ am Sonntag report has in any case prompted regulators to investigate both Swissfirst and the seven investors. The funds under scrutiny include those for industrial giants Siemens and Roche and Ist-Investmentstiftung, a CHF3.8bn pension fund targeted mainly at public employers.
The regulators are looking for any evidence of impropriety among the seven investors, including possibly acting in concert. Swiss laws on second pillar pensions prohibit trading on insider information even if it benefits pension funds.