Understandably, Charles-Henri Sabet, the executive suspended by Saxo Bank in early September pending an investigation by the Swiss Federal Banking Commission, is not happy.
But for Sabet, who was the chairman of Saxo’s Swiss subsidiary and its global head of trading, the fact that he has effectively been dismissed from the bank of which he is a shareholder is not the issue. Of more concern is what he sees as the tarnishing of his name and reputation.
When he was suspended, Saxo said it was because of an investigation by the commission. Rumours circulated that this was being conducted because of insider trading related to an equity option trade. However, Sabet denies this, instead arguing that his dismissal was purely because of politics.
Shareholder dispute
"This is really about an argument between shareholders," says Sabet. "I still own around 5% of Saxo and I was not happy with what I saw as the bank’s domestic focus. I offered to leave, but I wanted Saxo to buy my shares as was agreed when it took over Synthesis," he adds. Sabet says that Saxo is now focused on becoming a well-known name in Denmark, including giving backing to the small, centrist Liberal Alliance political party.
Saxo has declined to comment on whether or not the investigation came about because it informed the regulator of an irregularity, rather than the SFBC acting because it suspected suspicious activity. But a letter from the commission makes it clear it was informed by Saxo of the issue. This doesn’t seem so clear in light of an email sent to Saxo employees (see below).
According to Sabet, the chain of events unfolded after he took the equity option order from a well-established client after the close of the Swiss trading day in July. The order was a call option in biotech pioneer GeneNtech. Sabet says he placed the order the next morning and is adamant that he did not front-run or piggyback it.
However, he admits that he was in breach of a Swiss technical regulation, because as the executive of a Swiss bank he should not have accepted a client order himself. But he believes this is countered by the fact that he was also the head of trading of a Danish-regulated bank, which would have allowed him to do so. Saxo has declined to comment.
Sabet says he is also particularly upset that his dismissal was followed by a purge of his former employees, including his chauffeur. He believes that he will be fully exonerated when the SFBC reports its findings. In the meantime he is preparing to take legal action to clear his name and to complete the deal that was agreed when he sold Synthesis Bank to Saxo in September 2007; this included the verbal agreement to purchase his remaining shares in the bank.
Reported in the weeklyFiX, October
More Charles-Henri Sabet coverage on the FiX:
Exclusive: Saxo suspends Charles-Henri Sabet pending regulator’s investigation September 4, 2008
In early September, the bank suspended Charles-Henri Sabet, the chairman of its Swiss subsidiary and global head of trading.
Saxo makes first major acquisition: Synthesis Bank September 13, 2007
Charles-Henri Sabet, who formed Synthesis, will now take a role in Saxo’s senior executive management with responsibility for global trading.