Report flags conflict of interest appearance in ex-Fed bank presidents' trading
investing.com(Corrects paragraph 12 to show that the trading activity was disclosed after the fact)
By Michael S. Derby
NEW YORK (Reuters) -The U.S. central bank's internal watchdog said on Monday the former presidents of the Dallas and Boston Federal Reserve banks did not break the law but created the appearance of a conflict in interest in how they invested and reported their financial activity from 2019 to 2021.
Robert Kaplan, who announced in September 2021 that he would step down as head of the Dallas Fed amid a controversy over his trading, documented his investing in a way that «did not support public confidence in the impartiality and integrity» of the U.S. central bank, the report from the Fed's Inspector General (IG) said.
The report also chastised Kaplan for not providing in his official disclosure forms the specific dates for his trading and for not identifying trading involving the selling of stock option contracts.
It also said a Fed Board of Governors ethics officer recommended to the Dallas Fed's general counsel that Kaplan should provide more specifics in his 2020 disclosure form, but that official said Kaplan wanted to keep the document as it was «because he did not have the time to complete the revisions by the due date» requested of him. The Dallas Fed general counsel also said Kaplan said he would be more specific in future filings, the report said.
Then-Boston Fed President Eric Rosengren, who exited the Fed around the same time as Kaplan, failed to properly account for his trading and also created the appearance of a conflict of interest, the report said.
It zeroed in on a series of investments Rosengren made in real estate securities at a time when the Fed was intervening to support the housing sector, and
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