Watchdog report is critical of former Fed officials in stock trading controversy
cnbc.comA watchdog review into market trading from two former high-ranking Federal Reserve officials criticizes their actions but does not accuse either of doing anything illegal.
The report released Monday by the Fed's Office of Inspector General takes issue with trades made by former regional presidents Robert Kaplan of Dallas and Eric Rosengren of Boston.
Both men left their posts in September 2021 — Kaplan to early retirement and Rosengren for medical reasons — amid criticism over trading that ultimately saw Fed Chair Jerome Powell and Governor Richard Clarida come under question along with Atlanta Fed President Raphael Bostic.
Revelations showed that some Fed officials engaged in market trading at a time when they also were considering important and delicate policy matters in the early days of the Covid pandemic in 2020. The Fed ultimately slashed interest rates and launched a bevy of lending and liquidity programs that helped prop up financial markets as the pandemic crushed the U.S. economy.
While Clarida is mentioned in the OIG report, the details focus on Kaplan and Rosengren's actions. The report concludes that their actions resulted in conflicts of interest that raised issues over impartiality and the proper conduct of central bank officials.
CNBC has reached out to both former officials for comment. Kaplan, who traded millions in stocks and options and other securities, has said that his actions were in compliance with standards in place at the time.
With regard to Rosengren, the report faults him for not disclosing multiple trades on his 2020 ethics forms. Moreover, the report noted «multiple discrepancies» in brokerage statements and trading data.
Trades he made regarding real estate investment trusts at a time
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