Back in the spring of 2024, a bipartisan group of senators including both very woke Elizabeth Warren and MAGA Senator Rick Scott of Florida went on the attack against the Federal Reserve, exposing a trading scandal showing significant corruption within some of the highest levels of the financial organization.
Announcing as much in a press release, the bipartisan group said, “In a bipartisan letter to the Federal Reserve’s (Fed) Office of Inspector General (IG), U.S. Senators Elizabeth Warren (D-Mass.) and Rick Scott (R-Fla.) called out the Fed IG’s failure to hold officials accountable for violating Fed rules and fostering a culture in which severe conflicts of interests go consistently unchecked.”
Continuing, and summarizing some of the charges made in the letter, the press release from the bipartisan group said, “The lawmakers point to the recent closing of the investigation into suspicious trades made in 2020 by Robert Kaplan, former President of the Dallas Federal Reserve Bank, and Eric Rosengren, former President of the Boston Federal Reserve Bank, as the latest example of a culture that insulates Fed officials from accountability.”
It further added, noting that the shocking trades occurred during the pandemic, “During the Covid-19 pandemic, these officials engaged in investment trades while in possession of insider information about the Fed, raising public skepticism about the integrity of the Fed decision-making process and its high-ranking officials.”
Further, it noted that though such seemingly corrupt trades had been made, the Fed did nothing to stop or punish the men involved, saying, “The report, which took over two years to complete and found numerous unreported trades and discrepancies on the part of the officials, makes no suggestion to hold either official accountable–and is consistent with its 2022 report which let Reserve Board Chair Powell and Vice-Chair Clarida off the hook for similar violations.”
Describing one man’s potentially illicit activity, the press release further said, “In 2020, Kaplan made multiple $1 million-plus trades in more than a dozen companies, failing to report two trades on his 2020 Form A supplemental list of transaction dates. The Inspector General indicated that Kaplan may have been untruthful with regard to the information during the course of the investigation.”
The press release further stated, “Likewise, Rosengren did not report multiple trades and had multiple discrepancies between his brokerage statements and trading data and what he reported on his 2020 Form A, including seventeen purchases of real estate trusts at up to $250,000 each, at a time when he was ‘instrumental in policy decisions that influenced the nation’s housing market.’”
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If also noted, “The IG’s report underscores the insufficient conflict of interest rules and disclosure review processes at the Fed. The Office of Inspector General made six recommendations to improve accountability, including that the Board develop a new financial disclosure report review process with guidance and enforcement mechanisms. As of last month, a status report revealed the Fed has failed to impose stricter ethics requirements–the few actions taken by the Board to fulfill recommendations by the Inspector General appear to be inadequate.”
The bipartisan group, in their letter, wrote, “Your years-long delay before completing this investigation, your failure to hold Mr. Rosengren and Mr. Kaplan accountable for violating key Reserve Bank rules and policies, and your inability to address ongoing weaknesses in Federal Reserve ethics rules represent failures to uphold your mission of providing independent oversight of the agency.”