On Wednesday FINMA imposed special conditions on Coop Bank after an investigation of market conduct at a number of banks found “significant irregularities” at Coop, FINMA spokesperson Tobias Lux said in a statement.
“Enforcement proceedings initiated against the Coop Bank in March 2014 concluded that the bank inadmissibly propped up the market price of its own shares from the summer of 2009 to the spring of 2013.
“The bank's actions constituted a serious violation of the ban on market manipulation under supervisory law.”
FINMA said the bank, led at the time by 53-year-old Waespi, bought its own securities in order to counteract a fall in price.
“In particular, before and during the publication of business results, as well as at month and year-end, the bank propped up the exchange price of bearer shares.”
It added: “Neither the Coop Bank nor its staff made any personal financial gains through these actions.”
As well as imposing special conditions on the bank, FINMA has commenced separate proceedings against Waespi “who was mainly responsible for the market manipulation.”
The former CEO is banned from a management role for three years.
The decision has dire consequences for Aargau Cantonal Bank (AKB) which last July appointed Waespi as its new director to succeed Rudolf Dellenbach on his retirement in April 2015.
In a statement, AKB said: "The board of directors of the Aargau Cantonal Bank regrets the unexpected consequence of this development”.
The bank has now cancelled its contract with Waespi “by mutual agreement,” said the statement.
Dellenbach will now continue in office until a new successor has been found.
According to broadcaster SRF, Waespi informed AKB about FINMA’s investigation of Coop Bank, which started two months after Waespi applied for the new job, but those interviewing him thought it unlikely that proceedings would be initiated against him.
“We were of the opinion that it was very unlikely that Mr Waespi would receive a ban,” AKB President Dieter Egloff told SRF.
In a statement reported by SRF, Waespi said he was considering an appeal against the ban which he called “incomprehensible.”
In a further twist, newspaper Blick reported on Thursday that the disgraced Coop CEO was going to draw a salary from AKB of 690,000 francs, far exceeding a 600,000 franc wage cap imposed by the bank in 2012.