Former Federal Reserve Gov. Adriana Kugler Violated Trading Rules
Former Federal Reserve Governor Adriana Kugler has been found to have violated the central bank’s rules on trading individual stocks during blackout periods surrounding Federal Open Market Committee meetings to set interest rates, according to financial disclosures released by the Office of Government Ethics.
Fed ethics officials referred the matter to the OGE earlier this year, and an investigation is still ongoing at the central bank.
Days before the FOMC meeting in July, Kugler requested a waiver from Fed Chair Jerome Powell to divest impermissible holdings during a blackout period, which was denied. Subsequently, Kugler did not participate in the July meeting, citing a personal matter, and resigned ahead of her term’s expiration in January.
Previous Violations
This is not the first time Kugler has faced ethical issues. In October 2024, she disclosed that her husband made stock purchases in violation of Fed trading rules. Kugler immediately notified ethics officials and initiated divestiture of the assets as per FOMC ethics policies.
Latest Disclosures
In the latest disclosure, Kugler reported the purchase and sale of shares in various companies around FOMC meetings. These transactions included purchases of restaurant company Cava shares and Southwest Airlines stock, as well as investments in tech firm Apple.
Kugler also disclosed receiving pro bono legal services from a law firm in the filings. Despite resigning, Fed ethics officers declined to certify the filings.
Broader Ethics Concerns
Ethics violations by high-ranking Fed officials have been a recurring issue, eroding public trust in the institution. Previous incidents involving regional Fed presidents and the Vice Chair have also highlighted the need for stronger ethics rules.
In response to these challenges, the Fed implemented new rules barring officials from buying individual stocks and holding certain investments. Senate Banking Committee Chair Tim Scott emphasized the importance of reforming the Fed to regain public trust.
Call for Reform
Senator Scott and his Democratic counterpart, Senator Elizabeth Warren, have both called for stronger ethics rules at the Fed to ensure decisions are not influenced by personal or political interests. They underscore the need for transparency and integrity in the central bank’s operations.
For more information, you can refer to the source link Here.
