Swiss Central Bank Chief Accused Of Insider Trading

“Someone always knows” is the mantra that most traders live by when watching the tape on any security. It appears that this “someone” was Switzerland’s Central Bank Chief Philipp Hildebrand and his actions revolve around Switzerland’s currency intervention and his activities leading up to the move/announcement.

The allegation is that Philipp Hildebrand speculated on currency transactions, setting himself up to profit, only weeks before he instituted dramatic policy changes that shifted prices in his favour. Of course, this isn’t any surprise to anyone who has been following the equity markets over the last 3-4 years as this kind of folly has almost become common place. However, this high profile figure looks to be in a world of hurt if the allegations are proven true. You will recall last September when the Swiss National Bank shocked the currency markets by imposing a cap on the value of the franc against the euro to stop the soaring Franc which was killing Swiss exports.

The accusations were made by Swiss weekly newspaper Die Weltwoche in a statement before its Thursday publication. It said that previous reports that Hildebrand's wife was responsible for the foreign exchange transactions were misplaced and it was the bank chief who was behind the purchase and selling of currency that triggered an investigation by the Swiss National Bank (SNB).

According to the allegations, and reports in The Guardian, Hildebrand bought more than $500,000 in two transactions dated 15 August, which he then resold in September – making a profit of almost US$100,000 (£52,000).

What an idiot. If you are going to speculate in currencies as the leader of a central bank, do it with someone else’s account, not your own. You can read the entire story as printed in The Guardian here. Remember … someone always knows before you!