Federal Reserve Investigation Uncovers Violations by Atlanta Fed President
ATLANTA — We’ve recently learned that Raphael Bostic, the President of the Atlanta Federal Reserve, has come under scrutiny for violating some key rules. And while the situation is serious, it hasn’t led to any legal infractions so far.
Here’s a bit more context. Chair Jerome Powell of the Board of Governors of the Federal Reserve System requested an independent review back on October 14, 2022. This review aimed to look into Bostic’s trading, investment, and disclosure activities from 2017 to 2021. Specifically, the goal was to check whether his actions violated the law or Federal Reserve policies.
The findings from this investigation, released by Stephen Carroll, the Federal Reserve’s Associate Inspector General for Investigations, tell a mixed story. While Bostic’s actions did breach Fed policies, they didn’t go far enough to break any laws.
So, what exactly did the investigation uncover?
The report revealed that Bostic had violated several Federal Reserve policies related to trading and investment. The gist is that some of his financial transactions weren’t entirely above board. However, it’s important to note that these trades weren’t made using insider information. That’s a big deal because insider trading can lead to criminal charges.
How did this happen? Well, according to Bostic, the problematic financial transactions happened because of a third-party account manager. He explained that he’d taken extra steps to avoid managing his trades directly. Beyond using this third-party manager, he’d chosen not to monitor individual trades himself, even hiring a separate tax preparer to handle his taxes. This, he said, was to “eliminate the possibility” of appearing to use nonpublic information for his investment decisions.
The investigators found no evidence that Bostic’s trades were based on confidential FOMC (Federal Open Market Committee) information. They also noted he didn’t have any financial conflicts of interest. Independent verification confirmed that Bostic relied on third-party managed accounts and that neither he nor his personal investment advisors had the ability to direct specific trades.
However, the report emphasized that Bostic was still responsible for ensuring that all trades and investments made on his behalf complied with all applicable rules. This includes provisions addressing appearance standards. So, while the third-party manager handled his trades, Bostic should’ve made sure every trade was in line with Fed rules.
What’s next? The investigators have closed their investigation and referred it to the Federal Reserve Board for any potential further actions. A spokesperson for the Federal Reserve Board confirmed they have received the report and are currently reviewing it.
It’s a complicated situation, but the key takeaway is that Bostic’s actions, while not illegal, did breach Federal Reserve policies. As the Federal Reserve Board reviews these findings, they’re likely to decide if further steps are needed to rectify the situation.
In Other News
On a different note, a father in Gwinnett is facing his third trial after being charged in connection with the death of his 8-year-old daughter at home.
Stay tuned as we bring you more developments on both these stories.
