Swiss banker at centre of insider trading scandal

A Swiss banker who the MMI liquidator Mr Tom Kavanagh was informed was the beneficiary of an account on which £549,000 is owing, was at the centre of a ground-breaking case between the US and a Swiss bank in the early 1980s.

Mr Giuseppe Tome (69), the former President of Finvest, Switzerland and a former board member of the US stockbroking firm, E.F. Hutton, was behind a $3.5 million (€3.3 million) insider trading scandal which led a US court to threaten a Swiss bank that if it did not reveal a customer's name, it would suffer severe sanctions against its US operations.

Mr Tome and a number of other figures involved, gave the Banca della Svizzera Italiana permission to release their names after the judge's threat. Prior to the threat the bank was unwilling to disclose the clients' names. The American Bar Association has described the case as the "seminal example" of the US authorities approach to such foreign discovery matters.

Mr Tome had used a US branch of the Swiss bank to purchase shares in the St Joe Minerals Corp, just one day before Joseph E Seagrams & Co offered to buy the shares at a premium of $15 per share. Mr Tome had learned about the impending offer from the Seagrams chairman, Mr Edgar Bronfman, who used Mr Tome as a financial adviser and discussed the matter with him in the context of that relationship. Mr Bronfman was not a party to the insider trading.

The Italian-born Swiss banker is now wanted in the US but no extradition treaty exists for the particular offence for which he is wanted. Including interest, he owes $5.8 million in relation to the illegal profits he earned from the insider trading.

Mr Tome was contacted by Mr Kavanagh in relation to the £549,000 owed to MMI by five offshore companies associated with him. The banker denied he was the beneficiary and said he was only the financial adviser to the true beneficiaries. Mr Kavanagh believes the chance of recovering the debt is remote. Calls by The Irish Times to Mr Tome's Geneva home this week were not returned.