A Federal Reserve Bank Ignored Insider Trading Investigation When Re-Appointing Its President

NEW DOCUMENTS OBTAINED by a Federal Reserve watchdog group suggest that the Federal Reserve Bank of Richmond’s board of directors may have known that its president was under federal investigation when the board re-appointed him to a new term.

That president, Jeffrey Lacker, resigned his position this week after acknowledging his role in a leak of nonpublic information about Fed policy to an analyst for hedge fund and asset manager clients. The situation highlights the often cozy relationship between central bankers and Wall Street.

In a carefully worded announcement submitted by his attorney Tuesday, Lacker admitted to an October 2012 phone conversation with Medley Global Advisors analyst Regina Schleiger, where she described Fed deliberations over purchasing $45 billion of U.S. Treasury bonds per month as part of their quantitative easing program. Lacker did not deny this, or report Schleiger’s possession of confidential information to Fed staff. In his statement Lacker said, “I realized that my failure to decline comment on the information could have been taken … as an acknowledgment or confirmation of the information.”

Read on.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s