Swiss Freeze Funds Tied to Insider Case : U.S. Emergency Request Honored; Transfers Barred for 30 Days

From Reuters

A Swiss bank has been ordered to freeze accounts thought to have been involved in an insider trading scandal in the United States, a Justice Ministry spokesman said Tuesday.

Joerg Kistler said the accounts, held at Credit Suisse, belonged to two individuals and three companies, including Nahum Vaskevitch, 36, the former head of Merrill Lynch's mergers and acquisitions office in London. Merrill Lynch & Co. is the biggest U.S. brokerage.

The accounts were blocked under a treaty on legal assistance between the United States and Switzerland aimed at facilitating criminal investigations that might otherwise remain hidden under the veil of Swiss banking secrecy.

The order prohibits transactions on the accounts for an initial period of 30 days, after an emergency request from the United States arrived last Friday.

The U.S. Securities and Exchange Commission, which supervises stock trading, alleged this month that Vaskevitch and an Israeli associate, Daniel Sofer, 46, were behind an insider trading ring that netted profits of $4 million.

The order freezes accounts owned by Vaskevitch and Sofer as well as those of the companies Plenmeer Ltd. and Meda Establishment, Kistler said. He declined to name the third company, since it was not clear what role it played.

A spokesman for the bank said he was aware of the order. "Now we have to find out what is on the accounts," he said. He declined to give further details.

The SEC alleged in a New York court last week that Sofer transferred $1.9 million from a U.S. bank account of the company Plenmeer to an account at Credit Suisse.

"The Americans put two and two together and came looking here," Kistler said.

The freeze procedure closely paralleled last December's efforts by the U.S. Justice Department to unravel the Iran- contra scandal. An emergency request, documenting the possible involvement of the accounts, was lodged with the Swiss authorities in Berne to prevent funds being transferred while investigations were still under way.

The United States has 30 days to make a formal request for legal assistance, which, if accepted, would make the freeze an indefinite one.

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