Hildebrand Affair – Bad to Worse
(Follow up to Bruce Krasting's Kashya Hildebrand Speaks – Sinks Hubby? & Hildebrand Affair – Bad All Around)
By Ilene
I was wrong. Philipp Hildebrand was not above the law. Three unnamed sources said the Swiss National Bank's 11-member supervisory council "threatened to quit over the weekend unless Hildebrand stepped down." (Swiss central bank board pushed chief out)
In resigning, Hildebrand claimed “I’ve come to the conclusion that it is impossible for me to provide final, definitive proof that my wife carried out the transactions without my knowledge.”
It was impossible because he knew. According to Leigh Baldwin at Bloomberg,
"Philipp Hildebrand discussed buying dollars with his adviser at Bank Sarasin on the day his wife made a currency trade that led to his resignation as chief of Switzerland’s central bank, documents show. An e-mail by Hildebrand disputes that account…
"The e-mails, posted yesterday on the SNB’s website, offer two conflicting stories and show why Hildebrand couldn’t provide the definitive record he needed to keep his job."
More from Reuters:
EMAIL TRAIL
"In a note summarizing an August 15 meeting, advisor Scheuber said Hildebrand "would leave it up to his wife Kashya to decide" whether to buy dollars. Scheuber said he made the trade later that day after meeting Kashya at her art gallery office.
"In an email from Hildebrand to Scheuber the following day, copied to his wife and the SNB general counsel, he wrote: "We never discussed any dollar purchases yesterday. Given Kashya's email response and copy to me, I assume she gave you the order.
"'In future, for compliance reasons, you are not authorized to execute any currency transactions unless the order comes from me or I confirm it,' he said, adding 'Kashya: sorry about that but currencies really are a special case here.'
"Scheuber replied: 'Yes, Kashya yesterday gave me the verbal order, followed by the email later on. I also remember you saying in our yesterday's conversation that if Kashya wants to increase the USD exposure then it is fine with you.'
"Jean-Pierre Roth, the former SNB chairman who handed over to Hildebrand two years ago, said his successor should have reversed the trade as soon as he became aware of it.
"'He knew that several days later he would change monetary policy which would affect the franc exchange rate,' Roth told daily Le Temps. 'He made a serious error of judgment unfortunately and today he must pay the consequences."
Philipp went to great lengths to make sure he could argue (someday, if it ever came up) that he didn't know. As soon as the trade was set in motion he was trying to distance himself from the decision making process. His efforts to avoid taking responsibility, however, led to more and more lies.
According to the rules of the SNB, it is not permissible for executive officers to trade – buy and sell within a period of 6 months. Philipp clearly broke this rule. The level of Philipp's complicity in the matter gets worse each day. In "Key Hildebrand email not seen by investigation" the Financial Times reported:
"A key email between Philipp Hildebrand, the former chairman of the Swiss National Bank, and his financial adviser was seen by neither the central bank’s governing council nor auditors investigating his financial dealings.
"Following his resignation on Monday, Mr Hildebrand released correspondence between him, his wife Kashya and Felix Scheuber, their adviser at Bank Sarasin, a private Swiss bank. Some of the exchanges had been made available to the central bank and PwC for use in the internal investigation.
"However, an email in which Mr Schueber countered Mr Hildebrand’s claim that he was unaware of his wife’s plans to buy dollars was not provided to the central bank until January 5."
On Aug. 16, SNB's legal counsel, Mr. Hans Kuhn, had been copied in on Mr. Hildebrand's email denying knowledge of the transaction on Aug. 15, but Mr. Kuhn was not copied in on Mr Scheuber’s reply, "24 minutes later, in which he disputed Mr Hildebrand’s version of events." Mr. Schueber had written back "I also remember you saying in our yesterday’s conversation [sic] that if Kashya wants to increase the USD exposure then it is fine with you."
So as early as one day after the currency trade was initiated, Mr. Hildebrand was trying to pretend he was unaware of it. The full email trail, however, shows that Mr Hildebrand was actively involved in the financial dealings.
[Picture credit: William Banzai]
