Nater Dallafior achieves landmark decision on FINMA Watch List

Based on information obtained during its investigation against UBS Ltd., the Swiss Financial Market Supervisory Authority (FINMA) included a former UBS banker in its database known as Watch List, stating that he was “the highest-ranking person demonstrated to be involved in manipulating [LIBOR] rates. UBS terminated his employment”. According to FINMA, the Watch List contains information that is relevant in a future assessment of the compliance of an individual with proper business conduct requirements, should this person intend to assume a position in a financial institution that requires FINMA approval.

The former UBS banker, who was represented by Nater Dallafior, requested FINMA to remove him from the Watch List, arguing that his file was erroneous and resulted in a professional ban without a formal investigation. FINMA marginally changed the entry in its Watch List, but refused to remove the banker from the list. While the Swiss Federal Administrative Court upheld FINMA’s decision, the Swiss Federal Supreme Court approved the banker’s appeal and ordered FINMA to delete the banker’s entry in the Watch List. The Supreme Court acknowledged that article 23 para. 1 FINMAG provides for a sufficient legal basis for FINMA to maintain the Watch List, but ruled that only reliable information about the business conduct of the person in question may justify an entry in the Watch List, i.e. information established by proceedings in which the person in question was granted party rights, entries in official registers, results of correctly conducted internal and external audits and personnel assessments. No legal basis exists for assumptions or allegations of involved third persons or agencies, or any oral or written representation which has not been established and verified in contradictory or otherwise reliable proceedings. The Supreme Court found that the data collected by FINMA about the banker's business conduct derived from the administrative proceedings against UBS Ltd. in which the banker was not a party and, thus, was not reliable and must be erased.

The Nater Dallafior team included Roberto Dallafior, Maria Walter Burkhardt and Patrik Salzmann (Decision 1C_214/2016 of 22 March 2017).