ZURICH/BOSTON (Reuters) - Kashya Hildebrand is a workaholic “risk taker” who overcame a disruptive childhood move from her native Pakistan after the sudden death of her father to become a player on Wall Street and later a leading art promoter.
It was at hedge fund Moore Capital in New York that she first made a name for herself and met future husband Philipp Hildebrand, who resigned on Monday as head of the Swiss central bank due to a lucrative currency trade Kashya made weeks before he imposed a curb on the value of the Swiss franc.
Hildebrand told a news conference that he decided to quit after weeks of media pressure because he realized he could not prove that he had no prior knowledge of the trade when his wife initiated it last August.
Very little is known about the 50-year-old woman at the heart of a scandal that has shaken Switzerland, raised questions about its sacred bank secrecy and pushed out its slick young bank governor at a critical time for the country.
But Reuters was able to piece together a picture by talking to several people who know her well, including her brother and several artists who have worked with her.
Kashya’s brother Daneyal Mahmood, a gallery owner who lives in New York, uses words like “fearless” to describe his sister, who studied economics at Boston College before moving to New York.
“She was a good student, but I would not say exceptional. Kashya is far more pragmatic and action-oriented. Kashya’s genius emerges when you let her loose in the world. I would definitely describe her as a self-made woman,” Mahmood told Reuters.
People who have worked with her gallery are full of praise for her drive and willingness to “follow her gut” on artists who might not seem commercially viable.
“She is quite bold, taking on things that others might shy away from,” said Gabrielle Senza, who worked with Kashya in 2006. “She’s willing to take that risk.”
It was this strong-willed, independent streak which may have been behind the currency trade that backfired so badly on her and her 48-year old husband.
Philipp Hildebrand himself touched on this at a news conference last week at which he denied any wrongdoing and vowed to stay in his post.
“We married relatively late, and from the beginning our marriage has always been, how shall I put it ... Well, let’s say my wife is a strong personality,” said Hildebrand.
Kashya herself told Swiss television that she “felt good” about the trade, in which she used 400,000 Swiss francs to buy dollars because she believed at the time the dollar was “ridiculously cheap.”
She seems to have been oblivious to the fact that the transaction might compromise her husband, who as central bank governor was privy to confidential market-relevant information.
Hildebrand said he learned of the purchase a day later, and auditor PriceWaterhouseCoopers said Hildebrand informed the couple’s bank, Sarasin, that future deals would require his approval.
For good measure, he copied in the SNB’s compliance department, which ruled on September 7 that there should be no repeat of such trades. A day earlier, Hildebrand announced a cap on the Swiss franc, which had surged on fears over the euro zone debt crisis and economic threats outside Europe.
Kashya sold dollars for francs on October 4, by which time the U.S. currency had rebounded substantially against the franc.
Daneyal says his sister takes after their mother, Katharine Shepard Salter, an American from Wisconsin who loved to travel and settled in Pakistan after meeting her husband, a colonel in the army.
After their father died in a car accident in 1967, her mother moved the family from Rawalpindi, a dusty, bustling city near the capital Islamabad, to suburban Connecticut.
Kashya graduated from Boston College in 1983 and moved to New York, where at first she did menial temp work while living above a fish market in the Hell’s Kitchen area of Manhattan, her brother recalled.
Eventually she signed up with Moore Capital, a new hedge fund. She stayed there for 16 years, meeting Hildebrand after he joined in 1995.
“She had a research position and worked all night until dawn keeping an eye on what was going on in the international markets,” Mahmood said. “She loved the pace and the people at Moore Capital.”
The couple moved from London to Switzerland after Kashya became pregnant, and their daughter was born in 2000.
The following year, Kashya opened her first gallery in Geneva, where Hildebrand was working for Union Bank Privee, before expanding in 2003 with a space in New York.
After Hildebrand joined the Swiss National Bank in 2003, Kashya moved her gallery to Zurich and built up a reputation for fostering emerging talent, particularly from the Middle East and Asia.
After taking over as SNB president two years ago, Hildebrand hung a large painting of grey and brown stooped figures by Tianbing Li, a Chinese artist represented by his wife’s gallery, in his office.
“The art world intrigued me,” Kashya once told art magazine Canvas. “Given my success with my former career on Wall Street, I had enormous enthusiasm, self confidence and ambition and felt that this new aspiration was realistic.”
On Monday, following the resignation of her husband, she struck a more somber tone, apologizing to the Swiss people, the central bank and to her husband for what she called an “error in judgment.”
“I am deeply remorseful for my own behavior and my lack of recognition for its ramifications,” she said. “I have an infinite respect for the institution and this wonderful country and am deeply sorry for the distraction and agitation I have caused.”
Reporting by Katie Reid in Zurich and Tim McLaughlin in Boston; Additional reporting by Catherine Bosley in Zurich and Martina Fuchs in Dubai; Writing by Noah Barkin and Emma Thomasson; Editing by Hugh Lawson