Tuesday, January 3, 2012

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Plot thickens on SNB insider-trading allegation

by Euromoney Skew

The Swiss National Bank's president Philipp Hildebrand has been cleared of insider trading, after allegations that his wife sold Swiss francs just a few days before the currency's devaluation. However, now Christoph Blocher has been accused by Swiss media of tipping off authorities

It's not the best way to start the new year, but according to Swiss papers, the Swiss National Bank's (SNB) president Philipp Hildebrand and his wife Kashya were at the centre of an insider-trading allegation.

Hildebrand has since been cleared after a double investigation. According to media reports and domestic Swiss papers:

"Kashya, the wife of Philipp Hildebrand, sold Swiss francs just a few days before the Swiss National Bank initiated exchange controls and devalued the franc. The timing of the transactions was nearly perfect."

On 23 December 2011, the SNB said:

We had followed rumours that Philipp Hildebrand's wife Kashya made insider trading in the foreign exchange area.

Specifically, it concerned two transactions, three weeks prior to the connection on the franc to the euro 6 September occurred.

The Bank Council – the supervisory body for the SNB – has had to request the president of the SNB's transactions and all account movements of the family to examine retrospectively Hildebrand.

The findings: Hildebrand had done nothing wrong.

But the plot thickens. According to Switzerland's NZZ Online and SonntagsZeitung, Christoph Blocher, Swiss People's Party (SVP) vice-president, an opponent of Hildebrand, has:

"played a central role in ensuring that the Federal suspicious documents about the stock-market transactions by the wife of the National Bank president Philipp Hildebrand has been leaked".

However, his spokesperson has not confirmed the information and has since told Swiss journalists that the "papers had been remarkably well informed by both the federal authorities and Hildebrand himself".

Hildebrand is a member of the board of directors of the Bank for International Settlements (BIS) in Basel, as well as vice-chairman of the Financial Stability Board (FSB) as of early November.

The two newspapers' accusation of Blocher tipping off the government has been met with wider suspicion in Switzerland, as the government has yet to confirm or deny whether he was the informant – and we seriously doubt whether a government would name the whistleblower.

However, there is a good digest here - courtesy of World Radio Switzerland.

Blocher, a 71-year old chemicals industrialist billionaire, has made a controversial name for himself after his right-wing SVP launched a central campaign to their party in 2007 that:

"...depicted Switzerland as a society under siege from immigrants who have scant regard for the country's laws and customs".

The United Nations has dubbed the campaign as "racist". His controversial stature has also apparently led to more than 1,000 subscribers of the popular Swiss newspaper Basler Zeitung leaving the publication, after it was revealed that the paper is owned by the Blocher family.

In September, Blocher called for Switzerland to prohibit commercial banks from investment banking after UBS revealed it had lost more than $2 billion from the alleged rogue-trading scandal.

- Euromoney Skew Blog

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