Press release

FINMA issues reprimand to Valiant over violation of market conduct rules

With a decision dated 20 April 2012, the Swiss Financial Market Supervisory Authority FINMA has concluded administrative proceedings commenced in early 2011 against Valiant Holding AG and the former Valiant Privatbank AG (now Valiant Bank AG). Prior to a sharp fall in October 2010, Valiant propped up the price of its own registered shares against the general market trend and kept it artificially high. In doing so, it committed a serious violation of the supervisory provisions on market conduct, and infringed both its duty to ensure proper business conduct and its organisational requirements. FINMA therefore imposed special conditions on Valiant.

Between 18 and 21 October 2010, the price of Valiant registered shares, which until that time had remained stable in a narrow range between CHF 194 and CHF 206, fell by around 22%. The closing price on 21 October 2010 stood at CHF 152.70. Immediate investigations conducted by FINMA resulted in administrative proceedings being initiated in early 2011 that proved to be both time-consuming and complex.

The proceedings established that during the period preceding the abrupt share price drop, i.e. from August to October 2010, Valiant's conduct had violated the market conduct rules set out in FINMA Circular 2008/38. By means of proprietary trading, Valiant supported the price of its own registered shares to a degree that, FINMA concluded, constituted a violation of market conduct rules (market manipulation) under supervisory law. The following points were central to this assessment:

  • From August 2010 onwards, the price of Valiant registered shares came under increasing selling pressure. Valiant absorbed this pressure by strategically purchasing substantial quantities of Valiant registered shares and adding them to its own holdings.
  • The volume of purchases was geared to the price at the time, and was designed to prevent a further fall in the market price which would have triggered additional sales.
  • Valiant's market conduct did not constitute genuine bid and ask behaviour. As a result of the share purchases by Valiant, the share price bucked the general market trend until mid-October 2010 and declined only slightly, indicating that it was being artificially propped up.
  • The selling pressure constantly increased to a point at which, ultimately, Valiant was no longer able to absorb it by purchasing shares, with the result that the share price plummeted between 18 and 21 October 2010. Only then did the price return to a level that reflected genuine supply and demand.

In doing so, Valiant seriously violated its duty to ensure proper business conduct and its organisational requirements when conducting its proprietary trading.

In its decision, FINMA imposed special conditions on Valiant. However, it is also recognized that during the proceedings Valiant took measures to remedy the organisational shortcomings that had been identified.

FINMA's decision can be challenged before the Federal Administrative Court.


Tobias Lux, Media Spokesperson, phone +41 (0)31 327 91 71,