The head of the Zurich private bank Swissfirst, Thomas Matter, has stepped down with immediate effect in the wake of official investigations...

The head of the Zurich private bank Swissfirst, Thomas Matter, has stepped down with immediate effect in the wake of official investigations into alleged illegal insider trading. These came after a merger between Swissfirst and bankers Bellevue Group back in September 2005, although Mr Matter says: “I am utterly convinced that all transactions and business dealings surrounding the merger were conducted in accordance with laws and regulations”. He added that he was acting to protect his family and distance management and employees from the investigations. A raid on Swissfirst by officials on 17 August 2006 was triggered by questions surrounding why some pension funds and trusts sold shares to Mr Matter before the merger, thus losing out on the nearly 50 per cent gains that followed and, it is reported, handing Mr Matter a profit of SFr50 million ($41 million). On 18 August Swissfirst management offered to resign and to put the firm up for disposal; the company has now announced that it respects Mr Matter’s decision and will put a team of directors in charge for the moment. Press reports suggest that management at Swissfirst have used the steep drop in its share price to raise their holdings raising the likelihood that it will be taken private. Mr Matter has made his 17 per cent stake available to the board. Jürg Schäppi, who was appointed acting chief executive this week, has raised his personal holding from under 5 per cent to 6 per cent The bank has also confirmed that it will restructure its operations, including the sale of the private banking operations and probably change its name to distance itself from the investigations.