Fed Implements Strict Trading Restrictions After Major Ethics Scandal

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The Federal Reserve announced comprehensive trading restrictions for senior officials following a major financial ethics scandal. In response to controversial trades by regional Fed bank presidents Robert Kaplan and Eric Rosengren during the Covid-19 pandemic, the Fed imposed strict new rules prohibiting senior officials from trading individual stocks, bonds, derivatives, and government-backed securities. Senator Elizabeth Warren called for an SEC investigation, arguing the trades potentially violated insider trading laws, particularly highlighting a trade by Vice Chair Richard Clarida just before a major policy statement. The new rules require pre-approval for all trades, mandate holding periods for investments, and aim to restore public confidence in the Federal Reserve’s leadership by preventing conflicts of interest.

Sources & Citations

[1] Federal Reserve Board announces new rules to bar its senior officials from investing in individual securities · Oct 21, 2021 Tier 1

[2] The Federal Reserve imposes new restrictions on investments after trading controversy · Oct 21, 2021 Tier 1

[3] Elizabeth Warren demands insider trading investigation of the Fed · Oct 5, 2021 Tier 1

Tiers Tier 1 court records & gov docs · Tier 2 established outlets · Tier 3 regional & specialty press · Tier 4 opinion or single-source. Methodology →

Cite this entry

The Cascade Ledger. “Fed Implements Strict Trading Restrictions After Major Ethics Scandal.” The Capture Cascade Timeline, October 21, 2021. https://capturecascade.org/event/2021-10-21--fed-announces-trading-restrictions/