U.S. Sen. Elizabeth Warren (D-MA) is calling on the 12 regional presidents of the Federal Reserve to adopt stricter ethics rules that prohibit individual stock trading by them and their staff.
This follows media reports last week that Robert Kaplan, president of the Federal Reserve Bank of Dallas, “made multiple million-dollar-plus stock trades in 2020 … (involving) some combination of sales or purchases of over $1 million in 22 individual company shares or investment funds.”
Also, it had been reported that Eric Rosengren, president of the Federal Reserve Bank of Boston, “listed stakes in four separate real estate investment trusts and disclosed multiple purchases and sales in those and other securities.”
While both Kaplan and Rosengren pledged to sell their individual stock holdings and no longer trade individual stocks, Warren said their actions raise concerns about the perception of conflicts of interest by Fed officials.
Warren, chair of the Senate Banking, Housing, and Urban Affairs Subcommittee on Economic Policy,
is urging the regional Fed presidents to impose bans on the ownership of individual stocks by senior Fed officials and strengthen ethics and financial conflicts of interest rules for themselves and their staff.
“This controversy over asset trading by high-level Fed personnel highlights why it is necessary to ban ownership and trading of individual stocks by senior officials who are supposed to serve the public interest,” Warren said. “Regional Fed leaders must ban the ownership and trading of individual stocks by senior officials and impose strong and enforceable ethics and financial conflicts of interest rules for themselves and their staff to restore public trust. At a minimum, these rules should reflect the robust and comprehensive guidelines in my Anti-Corruption and Public Integrity Act. Instating critical ethics rules will send a clear and necessary message to the American people about the importance of government ethics and the integrity of Fed officials.”
Warren introduced the bicameral Anti-Corruption and Public Integrity Act in 2018, which would ban individual stock ownership by Members of Congress, Cabinet Secretaries, senior congressional staff, federal judges, White House staff, and other senior agency officials while in office. It would also prohibit all government officials from holding or trading stock where its value might be influenced by their agency, department, or actions. Further, it would require senior government officials and White House staff to divest from privately owned assets that could present conflicts.