Hildebrand E-Mails Show Clash of Accounts

Bloomberg, by Leigh Baldwin - Jan 10, 2012

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.

Philipp Hildebrand

Felix Scheuber, a relationship manager at Sarasin, said Hildebrand told him to “consider increasing his USD exposure,” though he would “leave it up to his wife Kashya to so decide,” according to a document titled “Client Contact Report,” dated Aug. 15, 2011. Later that day, Kashya Hildebrand instructed Scheuber to buy $504,000.

Last week, the 48-year-old former hedge fund manager vowed to stay on as the country’s central bank head, saying he had e- mails that proved Kashya Hildebrand acted independently. “My word is my bond,” he said yesterday in his resignation speech in Bern, telling journalists that his wife instructed Bank Sarasin to make the trade, which went through three weeks before the Swiss National Bank limited the franc’s exchange rate in its biggest policy intervention in three decades.

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.

In an e-mail to his wife and the client adviser at 7:36 a.m. on Aug. 16, the day after the trade, Hildebrand disputed Scheuber’s account, saying he was “surprised” at the “reference to a dollar transaction in your e-mail. We never discussed any dollar purchases yesterday.”

‘Special Case’

In a reply at 8 a.m., Scheuber went back to the previous day’s discussion. “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,” Scheuber wrote.

In the e-mail on Aug. 16, Hildebrand told Scheuber that he wouldn’t authorize future transactions of that type. For “compliance reasons, you are not authorized to execute any currency transactions unless the order comes from me or I confirm it,” he wrote. “I need to know and sign off on any trades that Kashya might instruct you on,” he said.

“PS: Kashya: sorry about that but currencies really are a special case here,” he wrote.

Benedikt Gratzl, a spokesman for Sarasin, told Bloomberg News that the documents are “accurate,” while declining to comment further.

“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,” Hildebrand said yesterday.

To contact the reporter on this story: Leigh Baldwin in Zurich at lbaldwin3@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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