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Swiss Pass Insider Trading Laws Long Sought by U.S.

December 17, 1987|From Reuters

BERNE, Switzerland — Switzerland's Parliament on Wednesday approved a government bill, long sought by U.S. authorities, to ban insider trading.

It should remove a long-running cause of tension with the United States and is likely to come into force in the first half of 1988, government officials said.

The bill, which was approved after a conflict between the Parliament's two houses over defining the limits of insider trading, will bring Swiss law in line with rules in the United States and several Western European countries.

It makes it a punishable offense to trade quoted shares on the basis of privileged information about new share issues, mergers or other equally important developments.

The lower house of Parliament, backed by Justice Minister Elisabeth Kopp, had wanted the law to apply explicitly to information relating to any change in a company's business, a move blocked by the upper house.

Although Kopp and the lower house gave in, the minister said Wednesday that she was satisfied the courts would interpret the law broadly enough to cover virtually all cases.

Insider trading has been an issue in Swiss-U.S. relations because, under Swiss law, the government was often unable to help U.S. regulators follow up American insider trading cases in Switzerland.

A 1982 agreement helped address U.S. concerns but brought complaints, strenuously denied by the government, that Switzerland was bowing to American pressure.

One of the most spectacular transatlantic clashes over insider trading began in 1981 in connection with the takeover of Santa Fe Corp. by Kuwait Petroleum. It was not until 1985 that Switzerland could turn over information sought by U.S. authorities.

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