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Unlike in Congress, Insider Trading Frowned Upon at Swiss Central Bank

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MADE IN SWITZERLAND
DailyFeed
The chief of Switzerland’s central bank, Philipp Hildebrand, has landed himself in a spot of controversy after Swiss media broke news last week that his wife might have made a currency trade based on insider information.
 
On Aug. 15 last year, Kashya Hildebrand, unbeknownst to her husband, used 400,000 Swiss francs to purchase $504,000, making a 60,000 ($64,400) franc profit in the process. One day later, upon learning of his wife’s dealings, Hildebrand informed Bank Sarasin, a Basel-based private bank, to only act on his instructions specifically in future, according to a PriceWaterHouseCoopers internal report on the trade commissioned by the Swiss National Bank, or SNB.
 
The SNB announced last month that the trade was not in violation of central bank rules, which it also made public today after growing criticism over its overly secretive culture.
 
As Businessweek describes, “The affair cuts to the core of Swiss politics and finance [since] Kashya Hildebrand’s currency purchase came about three weeks before the Swiss National Bank rattled investors by imposing a ceiling on the franc for the first time in three decades.”
 
"What motivated me to buy dollars was the fact that it was at a record low and was almost ridiculously cheap," Hildebrand’s wife was quoted as saying in Swiss tabloid Blick. "As I have worked in the financial and banking industry for over 15 year and always observe the markets, I felt at ease with this transaction."
 
Tomorrow, Philipp Hildebrand is expected to break his silence on the scandal and “comment on the last days’ events and respond to questions.”
 
Given that Mrs. Hildebrand is American, perhaps she took some tips from members of Congress, who, as CBS’s (VIA) 60 Minutes revealed, have for years taken advantage of a legal loophole to trade on insider information.
POSITION:  No positions in stocks mentioned.
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