Raphael Bostic, President of the Federal Reserve Bank of Atlanta, is under investigation by the Federal Reserve Board’s Office of the Inspector General (OIG) for violations of ethics guidelines designed to prevent insider trading, the Atlanta Fed announced Friday.
The Atlanta Fed’s ethics department found multiple inaccuracies in Bostic’s financial disclosures, most prominently a series of trades during “blackout periods” in March and April 2020 when Fed officials are not allowed to engage in trading, the Atlanta Fed reported Friday. This prompted Bostic to amend his financial disclosures going back to the beginning of his tenure in 2017 and issue a 7-page explainer where he claimed that he was unaware of the trades, alongside an official investigation by the OIG.
“As soon as I became aware that my financial reporting did not meet the expressed or implicit expectations necessary to maintain the public’s trust, I worked with the Federal Reserve Bank of Atlanta’s general counsel’s office, the Federal Reserve Board’s general counsel’s office, and my board of directors to provide corrected information to the board of directors of the Federal Reserve Bank of Atlanta, the Federal Reserve Board of Governors, and the public,” Bostic said in his explanatory document.
The Federal Reserve Board of Atlanta’s Ethics Officer signed off on Bostic’s 2021 disclosure, but noted “[t]he certification of this report is based on the understanding that he has now corrected his prior disclosures and divested his Treasury funds.” Furthermore, the Atlanta Fed noted that all past violations had been referred to the Federal Reserve Board of Governors for further review.
BREAKING: The head of the Federal Reserve’s Atlanta Bostic violated the US central bank’s trading rules and restrictions, reigniting one of the worst ethics scandals in the institution’s history, per FT.
— unusual_whales (@unusual_whales) October 14, 2022
“Chair Powell has asked the Office of Inspector General for the Federal Reserve Board to initiate an independent review of President Bostic’s financial disclosures,” a Federal Reserve spokesperson told the Daily Caller News Foundation. “We look forward to the results of their work and will accept and take appropriate actions based on their findings.”
The Federal Reserve Bank of Atlanta declined to comment, directing the DCNF to Bostic’s statement.
Separately, Atlanta Fed Chair Elizabeth Smith gave a statement on the issue, accepting Bostic’s explanation of the situation and the actions he had taken to rectify the situation.
“My board colleagues and I have confidence in President Bostic’s explanation that he did not seek to profit from any FOMC-related knowledge,” said Smith. “The directors appreciate that President Bostic has thoroughly corrected his financial forms, going back to when he first joined the Atlanta Fed.”
Smith noted that the Atlanta Fed was aware of the investigation that was underway by the OIG, and agreed to cooperate fully.
“We are aware of the matter and will conduct an independent and comprehensive investigation,” an OIG spokesperson told the DCNF.
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