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Swiss Regulator Orders Bank To Repay Profits For Market Manipulation

Stephen Little

22 November 2013

The Swiss Financial Market Supervisory Authority (FINMA), Switzerland’s financial watchdog, has told the Swiss cantonal bank Basler Kantonalbank to pay SFr2.64 million ($2.9 million) for violating market conduct rules.

The Swiss financial regulator said in a statement broke market rules by manipulating the market price of its own participation certificates in the period between January 2009 and the end of September 2012.

FINMA said that it had discovered "significant irregularities" in the trading of Basler Kantonalbank's participation certificates during the course of a market investigation and initiated enforcement proceedings in May.

The regulator said it was imposing special conditions and was also ordering disgorgement of the profits accrued in 2009 up to the summer of 2010, amounting to SFr2.64 million, which will go to the Swiss government.

Basler Kantonalbank said in a statement that it accepted FINMA's decision and had taken steps to prevent a repeat of the misconduct.

"In autumn 2011, Basler Kantonalbank tried to halt or at least dampen the decline in prices caused by the US tax dispute, through market intervention by buying up its own participation certificates. These support purchases were classified by FINMA as inadmissible," Basler Kantonalbank said.