The Fed Responds to Report that Fed Chair Powell Traded During FOMC Blackout Periods

 

The Fed Responds to Report that Fed Chair Powell Traded During FOMC Blackout Periods

By Pam Martens and Russ Martens: February 11, 2022 ~

A Fed spokesperson has provided Wall Street On Parade with a detailed response to our article yesterday, which documented that trades were made in accounts in which Fed Chair Jerome Powell had a financial interest during a Federal Open Market Committee (FOMC) meeting in 2015 and another in 2019. Fed officials are clearly prohibited from trading before and during FOMC meetings because that is when they have insider, market-moving information.

Below is the full statement from the Fed spokesperson. Following the statement, we will explain its many, serious flaws.

“Chair Powell has not traded during FOMC blackout periods. The transactions that were reported occurred in family trusts over which he had no control. Chair Powell is not a trustee and did not direct or control the trades. He relinquished his previous role as a trustee in 2012 when he joined the Federal Reserve as a Board Member.

“These transactions were regular trades for the purposes of the trust, e.g., raising money for donations under the terms of a charitable trust. The trust is legally required to make certain charitable donations every year. In practical terms, this means that transactions must occur in order to free up funds for those donations.

“The trust financial advisor was advised of our blackout periods and was directed to avoid transactions during those blackout periods. Although they were aware of the FOMC blackout dates, the advisor mistakenly made some transactions during some blackout periods. These transactions were reported as part of his publicly available financial disclosures, which have been available regularly every year since he joined the Board. They are available to anyone through the Office of Government Ethics website, OGE.gov.”

Flaw Number 1: The 2015 trades occurred in “Powell Family Trusts” 3 and 4; the 2019 trades occurred in the “Powell Family Trust 3.” Powell’s financial disclosure forms, which he signed, define what has to be reported under “Part 7, Transactions” as follows: “Part 7 discloses purchases, sales, or exchanges of real property or securities in excess of $1,000 made on behalf of the filer, the filer’s spouse or dependent child during the reporting period.” Thus, Powell or someone in his immediate household had an interest in the assets being sold during two separate FOMC meetings. The assets were not held in Blind Trusts, so Powell – who has a law degree – should have been on top of what was happening in these accounts.

Flaw Number 2: Powell signed an Ethics Agreement in 2017 where he agreed to the following:

“If I have a managed account or otherwise use the services of an investment professional during my appointment, I will ensure that the account manager or investment professional obtains my prior approval on a case-by-case basis for the purchase of any assets other than cash, cash equivalents, investment funds that qualify for the exemption at 5 C.F.R. § 2640.201(a), obligations of the United States, or municipal bonds.”

It follows, logically, that Powell would do the same thing for sales transactions, i.e., give his approval on a “case-by-case basis.”

Flaw Number 3: The statement regarding the need to raise cash to fund charitable donations is not convincing. Many wealthy individuals gift appreciated securities to charity, obtaining a tax advantage in doing so. Regardless, in both 2015 and 2019, waiting one extra day to make the trades would have avoided running afoul of the Fed’s prohibition on trading during the blackout period around FOMC meetings.

Flaw Number 4: Powell signs all of his financial disclosure forms, including those for 2015 and 2019. Why didn’t he notice that there were trades listed that occurred on FOMC meeting dates and issue a timely public apology?

Flaw Number 5: According to the Congressional Research Service, this is the prescribed procedure at the Fed that is supposed to prevent the problems outlined above, as well as those of the three Fed officials that have resigned over their own trading scandals since last September:

“Financial disclosure reports from covered officials, including the original entrance reports and the annual reports filed by May 15, are to be reviewed by supervisory ethics personnel to identify potential ethics and conflict problems, and to resolve any conflict of interest issues that may be raised by the ownership of certain assets by a particular public official. Remedial action which may be required by ethics officials to resolve identified conflicts of interest with respect to certain assets may include divestiture, establishment of a qualified blind trust, procurement of conflict of interest waivers, specific written recusal instruments, and requests for voluntary transfer or reassignment.”

It was not an Ethics Officer at the Fed who disclosed to the public the fact that trades in Powell’s accounts occurred on an FOMC meeting date. It was an activist group called Occupy the Fed.

In fact, the General Counsel and Ethics Officer of the Dallas Fed, Sharon Sweeney, allowed Dallas Fed President Robert Kaplan to trade in and out of “over $1 million” S&P 500 futures contracts from 2015 through 2020. These types of contracts can be used to make directional bets on which way the stock market is going to move. They trade during and after the stock markets in the U.S. have closed – almost continuously from Sunday evening to Friday evening. (See our report: Robert Kaplan Was Trading Like a Hedge Fund Kingpin for Five Years while President of the Dallas Fed; a Dozen Legal Safeguards Failed to Stop Him.)

Supervisory ethics personnel at the Fed also did not stop Fed Chair Powell from having upwards of $25 million of his family wealth managed by BlackRock while the firm was given three no-bid contracts by the Fed.

The Fed is not some mom and pop shop in Dubois. It’s the central bank of the United States with a current balance sheet of $8.9 trillion, 98 percent of which American taxpayers are on the hook for. It’s also in charge of supervising the most dangerous megabanks in the United States, which continue to be serially charged with crimes against the investing public while the Fed continues to bail them out.

Do we really want a man at the helm of this sprawling institution who can’t even own up to his failure to police his own trading activities?

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Activist Group Reports that Fed Chair Powell Traded During FOMC Restricted Periods: We Fact-Checked It and It’s True

 

Activist Group Reports that Fed Chair Powell Traded During FOMC Restricted Periods: We Fact-Checked It and It’s True

By Pam Martens and Russ Martens: February 10, 2022 ~

Fed Chair Jerome Powell Testifying Before Senate Banking Committee, November 30, 2021

An anonymous activist group called Occupy the Fed reported in a Substack article on Sunday that Fed Chair Jerome Powell traded on the final day of a Federal Open Market Committee (FOMC) meeting on April 29, 2015, when he was a Fed Governor, and also on the final day of an FOMC meeting on December 11, 2019, when he was Fed Chair. 

Powell’s trading directly violates the Fed’s written policy which prohibits trading “during the period that begins at the start of the second Saturday (midnight) Eastern Time before the beginning of each FOMC meeting and ends at midnight Eastern Time on the last day of the meeting.” The FOMC meetings are typically when the most sensitive and market-moving information occurs at the Fed, including votes on hiking or lowering interest rates and other confidential actions.

Dallas Fed President Robert Kaplan, Boston Fed President Eric Rosengren and Fed Vice Chair Richard Clarida have resigned over their own individual trading scandals and not one of them has been charged with anything as directly in violation of Fed policy as trading on the very day the FOMC is in session.

We fact-checked the Occupy the Fed report by downloading the dates of all FOMC meetings from 2015 through 2020 and comparing them to the trading transactions listed on Powell’s financial disclosure forms filed with the Office of Government Ethics (OGE) for years 2015 through 2020. We can verify that Powell traded on April 29, 2015 and on December 11, 2019. Both were the final day of the FOMC meeting. (You can read the minutes of those respective FOMC meetings here and here.)

The charts below show what Powell sold on those dates. We have eliminated any purchase transactions to avoid any possibility that the Fed would claim that these were made for dividend reinvestment purposes.

The FOMC meets eight times a year, roughly every six weeks. Multiply that by the six years of financial disclosures that the OGE has made available for Powell and you have a total of 48 FOMC meetings. Multiply the 48 meetings by two, since the FOMC meets for two days, and Powell had 96 opportunities to screw up and accidentally trade on an FOMC meeting date. But it happened on only two days during that six-year span of time – according to what we know thus far. And in both the years of 2015 and 2019, highly unusual activities were occurring at the Fed.

The year 2015 would mark the first time that the Fed had raised interest rates since it slashed them to the zero-bound range in 2008. There was a great deal of media talk in April regarding what was going to happen in various markets when the Fed raised its benchmark Fed Funds rates. The Fed didn’t raise its benchmark rate until December 17, 2015. 

The year 2019 marked the beginning of an unprecedented, emergency repo lending operation by the Fed. While the Fed made public that the repo loans were being provided to its 24 primary dealers, only the Fed knew that six large trading houses on Wall Street were getting the lion’s share of those loans. One of the six was Goldman Sachs. On December 11, 2019, the final day of the FOMC meeting, Powell sold between $115,000 and $300,000 of two Goldman Sachs proprietary mutual funds. The funds are listed as “GS” rather than Goldman Sachs on his financial disclosure forms. (See chart below.)

According to the Fed’s own H.4.1 report, on December 11, 2019, the same day that Powell dumped between $167,000 and $430,000 of predominantly stock mutual funds and ETFs, the Fed had an outstanding balance of $212.95 billion in emergency repo loans that had been used to prop up trading houses on Wall Street, including Goldman Sachs.

A larger question in all of this is why Powell is even allowed to be holding Goldman Sachs proprietary funds since Goldman Sachs is supervised by the Fed.

The Occupy the Fed report also makes the following charge against Powell:

“Instead of providing specific dates for the majority of his transactions, Powell improperly groups trades of like securities behind the phrase ‘Multiple’ on every OGE form he has filed.”

A report last year in the Washington Post indicated that a Fed spokeswoman had indicated to them that these “multiple” transactions “were for automatic dividend reinvestments – essentially transactions on autopilot and not subject to individual decisions.”

Very little is known about the Occupy the Fed group that scooped mainstream media with this story other than that it appears to be a fairly new group. Its Twitter account shows that it was opened in January 2021. Its Substack account shows it began on January 17, presumably of this year since only two articles are listed. Under “Who are we” on the Substack account, the following description is provided:

“We’re a group of like-minded regular people (workers, professionals, seniors, savers and others) who are disgusted and fed up with systemic corruption at the Federal Reserve and the total perversion of our American capitalist democracy. We’ve taken no money from special interests. We are doing this on personal time and expense because we’ve had enough.”

We have reached out to the Fed’s communications office for an explanation of Powell’s trading on these two FOMC meeting dates. We’ll update this article if we receive a response.

Powell’s term as Fed Chair expired this past Saturday and he is currently serving as Chair Pro Tempore. President Biden has nominated Powell to serve a second four-year term as Fed Chair but that requires an up vote by the Senate Banking Committee and the full Senate. Those votes have yet to happen, making Powell the first Fed Chair in a quarter century to be serving in a Pro Tempore capacity.

This latest report from Occupy the Fed simply adds to the withering criticism around Powell’s leadership of the Fed. Senator Elizabeth Warren, who sits on the Senate Banking Committee, called Powell a “dangerous man to head up the Fed” over his record of weakening Dodd-Frank legislative protections covering Wall Street megabanks. Powell has also presided over the worst trading scandal in the Fed’s history. His cozy relationship with Blackrock while the Fed awarded them three no-bid contracts has also raised eyebrows. Adding to all of this is the general consensus that Powell has fallen way behind the curve on the inflation that is ravaging Americans’ ability to make ends meet.

Trust in the Fed has been seriously weakened under Powell. That is reason enough for President Biden to reconsider this nominee.

Editor’s Update: The Fed has provided a detailed response. See the response and our critique here.

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Jerome Powell’s Term as Fed Chair Ended Last Saturday. The Senate Has Not Reconfirmed Him. What’s Up?

 

Jerome Powell’s Term as Fed Chair Ended Last Saturday. The Senate Has Not Reconfirmed Him. What’s Up?

By Pam Martens and Russ Martens: February 9, 2022 ~

Jerome (Jay) Powell

At 3:00 p.m. last Friday, the Federal Reserve quietly released the following statement:

“The Federal Reserve Board on Friday named Jerome H. Powell as Chair Pro Tempore, pending Senate confirmation to a second term as Chair of the Board of Governors. The action, effective February 5, enables him to continue to carry out his duties as Chair after the expiration of his term on the same day, and while the confirmation process is underway. In its annual organizational meeting in January, the Federal Open Market Committee separately named him as its Chair.”

This is the first time in a quarter century that a Fed Chairman’s term has lapsed before he was reconfirmed by the Senate. According to Reuters, the last time it happened was 1996 when Alan Greenspan served from March 3 to June 20 as Fed Chair Pro Tempore.

Powell has not even made it to a vote in the Senate Banking Committee, which has to happen before the full Senate can vote on his confirmation. So what’s going on? It appears that Democrats are playing hard ball since Republicans are waging a war against two of Biden’s other three nominees to serve on the Fed’s Board of Governors.

The two nominees under withering attack by Republicans are Sarah Bloom Raskin for Vice Chairman for Supervision and Dr. Lisa Cook for Governor. There is much less push back on the third nominee, Dr. Philip Jefferson.

Raskin is more than qualified as a former Fed Governor and former Deputy Treasury Secretary. But as Vice Chairman for Supervision, she would be in charge of supervising the megabank holding companies on Wall Street. The Fed has effectively outsourced that job to the New York Fed and Wall Street likes it that way. The megabanks on Wall Street literally own the New York Fed and its perpetual bailout spigot, so they are not happy about any supervision coming from Washington.

Helping Wall Street out in its push against Raskin is the fossil fuels industry and their toadies. On February 2, the Wall Street Journal had the audacity to run a propaganda piece by executives of two fossil fuel trade associations, masquerading as an “opinion” article.

The two executives, Tim Stewart, President of the U.S. Oil and Gas Association, and Kathleen Sgamma, President of Western Energy Alliance, which represents oil and natural-gas producers in the West, wrote that Raskin believes that fossil fuels pose “climate-change-related risks to the economy.”

According to a Gallup poll released in April of last year, 43 percent of Americans “worry a great deal” about climate change and a majority of Americans worry “at least somewhat.” Raskin is simply responding to the legitimate concerns of the American people, something that the Fed has said its listening tours around the country have been all about.

The attacks on Raskin have more to do with the fossil fuel lobby groups wanting to flex their muscles for their clients and Wall Street fearing actual supervision and nothing to do with Raskin’s credentials for the job.

Republican Mitch McConnell of Kentucky took to the Senate floor last Thursday to excoriate Raskin with the old trope that she will “pursue liberal environmental goals.” Shouldn’t saving the planet for our children and grandchildren be a goal that we can all unite around?

The Ranking Member of the Senate Banking Committee, Senator Pat Toomey, Republican of Pennsylvania, spent much of his opening remarks at the confirmation hearing for the Fed nominees last Thursday to excoriate Raskin over her stance on climate change.

Jefferson and Cook are both Black nominees. Jefferson is Vice President for Academic Affairs, Dean of Faculty and Professor of Economics at Davidson College. Jefferson previously served as Chair of the Economics Department at Swarthmore College. He was also previously an economist at the Board of Governors of the Federal Reserve System.

Cook is Professor of Economics and International Relations at Michigan State University. She earned a Ph.D. in economics from the University of California, Berkeley with fields in macroeconomics and international economics. She was previously an adjunct professor at Harvard University’s Kennedy School of Government.

If Lisa Cook is confirmed, she would be the first Black woman on the Fed’s Board of Governors in its 109-year history. (It seriously pains us to have to write that sentence.)

Last Thursday, Toomey criticized Professor Cook as a Fed nominee in his opening statement. He said “She has a Ph.D. but no academic work in monetary economics.” Jerome Powell, who has heavy Republican backing for a second term, has no Ph.D. in economics but instead has a law degree and got rich at the vulture fund Carlyle Group. Powell also presided over the largest trading scandal in Fed history. Exactly what his involvement in that scandal will turn out to be is unknown at this point because the results of the investigation, now entering its fifth month, are unknown.

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Bloomberg’s Craig Torres Shakes Up the Fed’s Zombie Press Conference with a Gutsy Trading Scandal Question

 

Bloomberg’s Craig Torres Shakes Up the Fed’s Zombie Press Conference with a Gutsy Trading Scandal Question

By Pam Martens and Russ Martens: January 28, 2022 ~

Craig Torres, Bloomberg News Reporter Covering the Fed and Economy

Fed Chair Jerome Powell’s press conferences are tortiously zombie affairs even for Fed wonks like us. The vast majority of questions coming from the press strictly adhere to coloring inside the lines. That means only slight variations on endless questions about inflation, asset tapering, timing of rate hikes and similar snoozers.

We were struggling to avoid nodding off during Powell’s press conference this past Wednesday when the Fed and economic reporter for Bloomberg News, Craig Torres, jolted us upright in our chair. Torres asked Powell a wonky question and then appended a follow up question about the Fed’s trading scandal. That part of the exchange went as follows:

Torres: “Chair Powell, I have a quick administrative question. You know, Robert Kaplan’s disclosure of his securities transactions: In a couple of months, Chair Powell, or maybe sooner, you and I will file our tax returns. And we’ll list transactions and all kinds of things. And next to those transactions we’ll put dates. And Bloomberg asked for the dates of Mr. Kaplan’s transactions. The Dallas Fed is not giving us the dates. And I don’t see why this is a matter for the Inspector General or anybody else. I mean, why can’t he give us the dates? Will you help us get the dates of those transactions? Thanks.”

Powell: “I know you’ve been all over this issue with my colleagues, Craig, on the issue of information. We don’t have that information at the Board. And, you know, I had — I asked the Inspector General to do an investigation, and that is out of my hands. I’m playing no role in it. I seek to play no role in it. And I don’t — I really — I can’t help you here today on this issue. And I’m sorry I can’t.”

Torres was not suggesting that the trading scandal itself is not “a matter for the Inspector General or anybody else.” Clearly, the trading scandal is a matter for the SEC and the criminal division of the Justice Department. (See our report:  Robert Kaplan Was Trading Like a Hedge Fund Kingpin for Five Years while President of the Dallas Fed; a Dozen Legal Safeguards Failed to Stop Him.)

Torres was suggesting that there is no reason for the dates of Kaplan’s trades to be withheld from the public because of any ongoing investigation because that information was previously legally owed to the American people and Kaplan didn’t provide it as legally required. Thus, as they say in the courtroom, it’s “ripe” for disclosure.

When Kaplan made his multiple “over $1 million” trades in bets on which way the stock market would move using S&P 500 futures – during the year of 2020 when he was both sitting as a voting member of the Fed’s FOMC as well as making market-moving comments himself to the media – he was legally obligated to report the dates of each individual buy and sell on the form provided to him by the Dallas Fed. Every other regional Fed Bank President listed the dates of the buys and sells. But Kaplan simply wrote the word “multiple” where the date was required. (See Kaplan’s financial disclosure forms from 2015 through 2020 here.)

Kaplan is a sophisticated investor who spent 22 years at Goldman Sachs, rising to the rank of Vice Chairman. He clearly knew, for five solid years, that he was not providing the dates of his trades as required by the mandated financial disclosure form. That, in and of itself, is a smoking gun. Why withhold information if you have nothing to hide?

What Craig Torres should do now is what the late Bloomberg reporter Mark Pittman did in 2008. He should march into the newsroom and ask his boss if he can file a lawsuit in federal court to get the information that the Dallas Fed refused to turn over. But instead of filing a lawsuit against the Fed, which is likely telling the truth and doesn’t have Kaplan’s trading records (because it’s incompetent at policing trading abuses within its own ranks as well as on Wall Street) Torres and Bloomberg should file a lawsuit against Kaplan himself.

Think about that for a moment. Kaplan is now a private citizen. He can no longer hide behind the shield of the Dallas Fed. The information was legally required to be filed by him from 2015 through 2020 and he didn’t file it. It belongs to the American people and to the press. It is long overdue so the court should demand its immediate release. Kaplan’s stalling tactics are grinding investigative journalism in this critical area of public interest to a halt.

In addition, Torres could ask the court to make Kaplan turn over not simply the dates of his trades but the trade confirmations from his brokerage firm to confirm that he’s now being forthright about these trades. That would provide a major piece of information about the name of the brokerage firm that had such lax compliance procedures that it allowed a Fed Bank President with insider information to trade like a hedge fund kingpin. As we previously reported, Goldman Sachs Refuses to Say If It Was Placing Trades for Dallas Fed President Kaplan.

Another reason that Torres should ask to file this lawsuit alongside Bloomberg News is to find out if Bloomberg News, with billionaire Mike Bloomberg at the helm, is willing to back up its investigative reporters. Mike Bloomberg was Mayor of New York City with someone else in charge of his publishing empire when Pittman filed his lawsuit against the Fed.

Mike Bloomberg’s willingness to meddle and defend rogue actors is on full display in a headline at Bloomberg News today. He’s written an opinion piece telling Congress to back off bringing antitrust legislation against big tech companies. Should the public be listening to a billionaire tell Congress what legislation it should bring when Mike Bloomberg used his own wealth to overturn term limits in New York City so that he could get a third term as Mayor?

You might be questioning why Wall Street On Parade hasn’t brought such a case against Kaplan to federal court since we seem to be in possession of all of the salient details. It’s because we’re a two-person research and writing team and we’re already hard-pressed to pick up the slack on what mainstream media won’t report. For example, consider our report: There’s a News Blackout on the Fed’s Naming of the Banks that Got Its Emergency Repo Loans; Some Journalists Appear to Be Under Gag Orders.

If Bloomberg News files the lawsuit, it can do what it did in the Pittman case. It can get other major media outlets to support its position in an Amicus Brief. It’s time for American journalists to come out of our COVID caves and re-engage in a participatory democracy. 

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Dallas Fed, Home to the Largest Trading Scandal in Fed History, Quietly Runs a Help-Wanted Ad for a New General Counsel and Ethics Officer

 

Dallas Fed, Home to the Largest Trading Scandal in Fed History, Quietly Runs a Help-Wanted Ad for a New General Counsel and Ethics Officer

By Pam Martens and Russ Martens: December 24, 2021 ~

Robert Kaplan, Former President of the Dallas Fed

The Dallas Fed has not publicly announced the retirement or dismissal of its General Counsel, Sharon Sweeney. And yet, it is currently running a help-wanted ad to replace her. Sweeney is still listed as General Counsel on the Dallas Fed’s website. We placed a call to the bank’s media contact this morning to clarify the details and left a message. We’ll update this article if we receive further information.

Sweeney has been with the Dallas Fed for the past 36 years. She doubles as the Dallas Fed’s Ethics Officer and put her signature to former Dallas Fed President Robert Kaplan’s outrageous financial disclosure forms, year after year. Those forms indicated that Kaplan was trading in and out of S&P 500 futures contracts in “over $1 million” trades – even in 2020 when he sat as a voting member of the Fed’s Open Market Committee and was privy to sensitive, market moving operations of the Fed to deal with plunging markets and business closures as a result of the pandemic. Kaplan also made “over $1 million” trades in numerous individual stocks. (See Kaplan’s financial disclosure forms from 2015 through 2020 here.)

After news of Kaplan’s trading went viral this year, he stepped down on September 27. The same day, the President of the Boston Fed, Eric Rosengren, also stepped down. Rosengren had been trading in and out of real estate investment trusts in 2020.

S&P 500 futures allow an individual to trade almost around the clock from Sunday evening to Friday evening, while stock exchanges in the U.S. are open only on weekdays from 9:30 a.m. to 4:00 p.m. ET. S&P 500 futures gave Kaplan access to making directional bets on where the market would go after the stock market closed, which is typically when the Fed makes market-moving announcements. The most popular and liquid S&P 500 futures contract is the E-mini. A trader can get as much as 95 percent leverage on this contract – far more than the 50 percent leverage that is available for stock trades.

Kaplan is a sophisticated Wall Street veteran who worked at Goldman Sachs for 22 years, rising to the rank of Vice Chairman. As such, he would have certainly understood that the type of trading he was doing could subject him to an investigation for insider trading as well as removal from his job. But instead of avoiding all trading activity, Kaplan jumped in with both feet according to his financial disclosure form for 2020.

The year 2020 presented a prime opportunity for a nimble trader to make huge gains (or losses) in the stock market from short-term trading. As a result of the lockdowns from the pandemic, GDP fell by 31.4 percent in the second quarter of 2020– the largest decline on record. At numerous times during 2020, the Fed was making dramatic market-moving announcements of interest rate cuts and the creation of a multitude of emergency lending facilities and emergency measures. From January 1, 2020 through April 30, 2020, based in no small part on these Fed announcements, the S&P 500 Index gyrated from down 30 percent in late March to up 10 percent by the end of April.

Adding to suspicions surrounding Kaplan, and Sweeney who signed off on his trading disclosures, was the fact that Kaplan failed to follow the specific instructions on his financial disclosure forms and provide the date of each trade. Where the purchase date or sell date should have been indicated, Kaplan simply placed the word “multiple.”

Wall Street On Parade requested the specific dates of Kaplan’s trades from the Dallas Fed. They declined to provide them. We filed a Freedom of Information Act (FOIA) request with the Federal Reserve Board of Governors. After stonewalling us, it eventually said it did not possess the trading information.

The mere hint that a Federal Reserve Bank President was trading in S&P 500 futures contracts should have sent its General Counsel/Ethics Officer racing to its Board of Directors to report this serious matter. And yet, Kaplan’s financial disclosure forms show he was able to get away with this type of trading since joining the Dallas Fed as its President in 2015.

The new help-wanted ad the Dallas Fed posted this week for a new General Counsel indicates these desired character traits:

“Leads with a clear set of values, demonstrates integrity in all situations and is a role model of ethical conduct

“Expertise with current and evolving legal issues and trends in banking, financial regulation, payments, technology and governance and ethics…”

The ad also states this: “OUR BANK has one of the most recognizable brands around the world.” That is true now, thanks to Kaplan and Sweeney, but not in a good way.

To date, there has been no word that the Securities and Exchange Commission or Justice Department is involved in the investigation of Kaplan’s trading. Federal Reserve Chair Jerome Powell has indicated that he referred the Fed’s trading scandal to the Fed’s Inspector General. Unfortunately, the Fed’s Inspector General reports to the Fed’s Board of Governors and he can be terminated by them with a two-thirds vote. That’s not what the American people will accept as an “independent” investigation.

Making this trading scandal all the more urgent for the Justice Department is the fact that there is significant reason to believe that two mega banks on Wall Street, both of which are supervised by the Fed, may have been involved in the trading by Kaplan and former Boston Fed President Rosengren. See our report: New Documents Show the Fed’s Trading Scandal Includes Two of the Wall Street Banks It Supervises: Goldman Sachs and Citigroup.

https://wallstreetonparade.com/2021/12/dallas-fed-home-to-the-largest-trading-scandal-in-fed-history-quietly-runs-a-help-wanted-ad-for-a-new-general-counsel-and-ethics-officer/