SWITZERLAND - Publica, one of Switzerland's largest pension funds, is the latest scheme to become embroiled in the Swissfirst insider trading scandal.

The CHF30bn (€18.9bn) fund has admitted to selling shares in the Swiss bank but denies any involvement in the alleged scandal that has engulfed the Swiss pension industry.

Numerous funds have been named in connection with the alleged scam following media reports.

In a statement, Publica said it sold 68,100 shares in Swissfirst for CHF57.5 on September 7, or shortly before Swissfirst announced a merger with Bellevue, another Swiss bank.

"The sale, however, had nothing to do with the Swissfirst's subsequent merger with Bellevue. Publica was not informed about this merger," Publica, which serves Swiss federal employees. said.

"If it had been, it would have not sold its shareholding due to the expected surge in the share (of Swissfirst)."

Swissfirst's shares jumped to CHF73.5 when the merger was announced on September 12. Hence, Publica sacrificed a potential gain of CHF1m.

Publica is the now the seventh Swiss pension fund (Pensionskasse) that has been found to have sold shares in Swissfirst shortly before the merger. Others include the Pensionskasse for technology firm Siemens and the one for pharmaceuticals firm Roche.

Swiss regulators are investigating both Swissfirst and the Pensionskassen to determine any evidence of insider trading. Swissfirst chief executive Thomas Matter vehemently denies that insider trading took place and believes that he is a victim of a defamation campaign.

Meanwhile, ASIP, the main lobby for Swiss Pensionskassen, angrily hit back at Ulrich Grete, president of Switzerland's Social Security Fund.

On Friday, Grete told a newspaper that the Swissfirst affair was caused by "bunglers" in the supervisory boards of the Pensionskassen.

"Despite the fact that numerous investigations are going on and in the meantime, the principle of innocent until proven guilty applies, management of Swiss Pensionskassen are being made scapegoats," ASIP said.

"To condemn the system of second pillar pensions, which has worked for decades in the interest of the insured and to call those responsible at Pensionskassen bunglers is ridiculous, unfair and polemic. ASIP wholeheartedly dismisses such defamations and claims," the association added.
ASIP also said there were already enough rules to discourage and prevent illegal or criminal behaviour among managers and supervisors of Pensionskassen. As an example, it cited a code for best practice in second pillar pensions.
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