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Source: ABCNews
Dallas Fed President Robert Kaplan resigns after controversy over stock market trading
Kaplan is the second Fed president to resign Monday. Controversy swirled for Kaplan and Boston Fed President Eric Rosengren after the disclosure of their involvement in high-value trading.
Robert Kaplan, president of the Federal Reserve Bank of Dallas, speaks at the Council on Foreign Relations in New York on May 31, 2017. Michael Nagle / Bloomberg via Getty Images file
September 28, 2021 | By Jeff Cox, CNBC
Dallas Federal Reserve President Robert Kaplan became the second regional central bank leader to resign Monday, saying he was stepping down early following a recent controversy over stock market trades he made.
Kaplan's early retirement follows an announcement earlier in the day from Boston Fed President Eric Rosengren, who said he will leave. He cited health concerns, and not the issue over his investment portfolio activity.
"The Federal Reserve is approaching a critical point in our economic recovery as it deliberates the future path of monetary policy. Unfortunately, the recent focus on my financial disclosure risks becoming a distraction to the Federal Reserve's execution of that vital work," Kaplan said in a statement.
"The recent focus on my financial disclosure risks becoming a distraction to the Federal Reserve's execution of [its] vital work."His retirement takes effect Oct. 8. The resignations come a day before Fed Chair Jerome Powell is to spend two days on Capitol Hill updating legislators on the Fed's efforts to combat the economic impact of the Covid-19 pandemic.
Controversy had swirled over the issue following disclosures that Kaplan in particular had been executing large-dollar trades in big-name companies such as Amazon, Apple and Delta Air Lines. The Wall Street Journal first reported the trades.
Subsequent to the disclosures, both Kaplan and Rosengren said they would be selling their stocks to avoid the appearance of conflict. Questions were raised because the Fed has conducted trillions of dollars in asset purchases aimed at helping markets function, and has bought corporate bonds from mega-cap companies including Apple.
Please go to ABCNews to read more boilerplate coverage called "news."
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Source: Wall Street on Parade
Was Boston Fed President Rosengren Trading with Citigroup's Money?
By Pam Martens and Russ Martens: September 29, 2021 ~
[image: fed chair Jerome Powell]
The culture of Wall Street has now completely engulfed the Fed: it's legal if you can get away with it.
For more than five years the President of the Dallas Fed, Robert Kaplan, was trading like a hedge fund kingpin in "over $1 million" transactions in S&P 500 futures while refusing to follow the requirements of the Fed’s financial disclosure form and list the specific dates of his purchases and sells so that the transactions could be examined for whether he had inside information from the Fed at the time. That information is now as much as five years overdue to the American people and we have asked the Dallas Fed to provide it promptly.
The Dallas Fed further hampered the free press in America from doing its job by refusing to answer our simple question as to whether Kaplan was shorting stocks or S&P 500 futures during the pandemic crisis in 2020.
Then the Dallas Fed Board of Directors released a statement on Monday saying that Kaplan "sold all of his personal holdings related to financial institutions over which the Federal Reserve had regulatory oversight," when he joined the Dallas Fed. On Tuesday we published documented proof that Kaplan continued to own four proprietary products from Goldman Sachs, one of which is so opaque that it hasn't even filed a prospectus or offering memorandum with the Securities and Exchange Commission. (Goldman Sachs has been under Federal Reserve regulatory oversight since September 21, 2008 when it became a bank holding company in order to claim its share of the bailout money the Fed was secretly showering on the trading houses on Wall Street.)
Now it turns out that Boston Fed President Eric Rosengren's wife had a $150,000 to $500,000 "Secured Loan for Investment" with Citigroup's federally-insured bank, Citibank. Rosengren's financial disclosure form shows that all 68 of his purchases and sells in individual stocks and REITs in 2020 occurred in his joint account with his spouse.
It had been more than 72 hours since we asked the Boston Fed to clarify for us if this was a margin loan used by the Rosengrens to trade stocks. This morning we received a response from the Boston Fed saying we should receive an answer by midday today. We will update this article when we receive that promised response.
The Boston Fed's Code of Conduct prohibits the following: "an employee with regular and ongoing access to Class I FOMC information may not own or control, directly or indirectly, any debt or equity interest in a primary government securities dealer or an entity that directly or indirectly controls a primary dealer. The employee is regarded as controlling any debt or equity interest held by the employee's spouse or minor child." (Italics emphasis added.)
Mortgage loans on a primary residence and credit cards from Fed supervised financial institutions are generally allowed at all of the regional Fed banks for its employees, provided the terms are not more preferential than they would be for the general public.
Rosengren has sat in on all of the Fed's FOMC meetings (as do all Fed Bank Presidents) since he became Boston Fed President in July 2007. He has rotated with other Fed Bank Presidents as a voting member of the FOMC every three years. He first became a voting member of the FOMC in August 2007.
Citigroup is a supervised entity of the Federal Reserve and owns the primary dealer, Citigroup Global Markets. Citigroup was the largest recipient of the Fed's bailout facilities during and after the 2008 financial crash, receiving over $2.5 trillion in cumulative loans according to the Government Accountability Office's (GAO) audit of the bailout facilities. The Federal Reserve is not allowed to make loans to insolvent institutions, which Citigroup was for much of that time, but the Fed thumbed its nose at the law and made the loans to Citigroup anyway. (On Wall Street, it's legal if you can get away with it.) The man who oversaw much of that loan activity to Citigroup, Tim Geithner, who was then President of the New York Fed, was rewarded with the plum job of U.S. Treasury Secretary.
Despite all of this, based on the testimony by Fed Chair Jerome Powell at yesterday's Senate Banking Committee hearing, the Fed has decided to dispense with the pesky detail of using federal law enforcement to investigate the trading activities of the Dallas Fed and Boston Fed Presidents. Instead of allowing the Department of Justice and the Securities and Exchange Commission to determine if federal laws have been broken, Powell told Senator Raphael Warnock (D-GA) yesterday that the Fed is, effectively, investigating itself. The exchange went as follows:
Warnock: "Yesterday it was reported that the regional Federal Reserve Bank Presidents in Boston and Dallas are resigning, following earlier reports that they were actively trading their private investments while the bank was intervening in the markets.
"Throughout the COVID-19 pandemic, many experts have underscored the importance of maintaining the independence of the central bank. Independence, of course, is necessary before the pandemic, after the pandemic, during the pandemic.
"Even though neither serves now as voting members of the Federal Open Market Committee, this is a blow to the image of the central bank serving as an impartial and independent agency charged with maintaining stability and pricing and employment.
"Chairman Powell, what immediate actions have you taken to ensure the impartiality of the Fed and what systems that are in place failed here and how do you plan to fix them going forward?"
Powell: "Our need to sustain the public's trust is the essence of our work. We want the public to understand that we work for all Americans. So we don't like to be having these concerns raised. It's really something that's really very concerning.
Please go to Wall Street on Parade to read more.
For more than five years the President of the Dallas Fed, Robert Kaplan, was trading like a hedge fund kingpin in "over $1 million" transactions in S&P 500 futures while refusing to follow the requirements of the Fed’s financial disclosure form and list the specific dates of his purchases and sells so that the transactions could be examined for whether he had inside information from the Fed at the time. That information is now as much as five years overdue to the American people and we have asked the Dallas Fed to provide it promptly.
The Dallas Fed further hampered the free press in America from doing its job by refusing to answer our simple question as to whether Kaplan was shorting stocks or S&P 500 futures during the pandemic crisis in 2020.
Then the Dallas Fed Board of Directors released a statement on Monday saying that Kaplan "sold all of his personal holdings related to financial institutions over which the Federal Reserve had regulatory oversight," when he joined the Dallas Fed. On Tuesday we published documented proof that Kaplan continued to own four proprietary products from Goldman Sachs, one of which is so opaque that it hasn't even filed a prospectus or offering memorandum with the Securities and Exchange Commission. (Goldman Sachs has been under Federal Reserve regulatory oversight since September 21, 2008 when it became a bank holding company in order to claim its share of the bailout money the Fed was secretly showering on the trading houses on Wall Street.)
Now it turns out that Boston Fed President Eric Rosengren's wife had a $150,000 to $500,000 "Secured Loan for Investment" with Citigroup's federally-insured bank, Citibank. Rosengren's financial disclosure form shows that all 68 of his purchases and sells in individual stocks and REITs in 2020 occurred in his joint account with his spouse.
It had been more than 72 hours since we asked the Boston Fed to clarify for us if this was a margin loan used by the Rosengrens to trade stocks. This morning we received a response from the Boston Fed saying we should receive an answer by midday today. We will update this article when we receive that promised response.
The Boston Fed's Code of Conduct prohibits the following: "an employee with regular and ongoing access to Class I FOMC information may not own or control, directly or indirectly, any debt or equity interest in a primary government securities dealer or an entity that directly or indirectly controls a primary dealer. The employee is regarded as controlling any debt or equity interest held by the employee's spouse or minor child." (Italics emphasis added.)
Mortgage loans on a primary residence and credit cards from Fed supervised financial institutions are generally allowed at all of the regional Fed banks for its employees, provided the terms are not more preferential than they would be for the general public.
Rosengren has sat in on all of the Fed's FOMC meetings (as do all Fed Bank Presidents) since he became Boston Fed President in July 2007. He has rotated with other Fed Bank Presidents as a voting member of the FOMC every three years. He first became a voting member of the FOMC in August 2007.
Citigroup is a supervised entity of the Federal Reserve and owns the primary dealer, Citigroup Global Markets. Citigroup was the largest recipient of the Fed's bailout facilities during and after the 2008 financial crash, receiving over $2.5 trillion in cumulative loans according to the Government Accountability Office's (GAO) audit of the bailout facilities. The Federal Reserve is not allowed to make loans to insolvent institutions, which Citigroup was for much of that time, but the Fed thumbed its nose at the law and made the loans to Citigroup anyway. (On Wall Street, it's legal if you can get away with it.) The man who oversaw much of that loan activity to Citigroup, Tim Geithner, who was then President of the New York Fed, was rewarded with the plum job of U.S. Treasury Secretary.
Despite all of this, based on the testimony by Fed Chair Jerome Powell at yesterday's Senate Banking Committee hearing, the Fed has decided to dispense with the pesky detail of using federal law enforcement to investigate the trading activities of the Dallas Fed and Boston Fed Presidents. Instead of allowing the Department of Justice and the Securities and Exchange Commission to determine if federal laws have been broken, Powell told Senator Raphael Warnock (D-GA) yesterday that the Fed is, effectively, investigating itself. The exchange went as follows:
Warnock: "Yesterday it was reported that the regional Federal Reserve Bank Presidents in Boston and Dallas are resigning, following earlier reports that they were actively trading their private investments while the bank was intervening in the markets.
"Throughout the COVID-19 pandemic, many experts have underscored the importance of maintaining the independence of the central bank. Independence, of course, is necessary before the pandemic, after the pandemic, during the pandemic.
"Even though neither serves now as voting members of the Federal Open Market Committee, this is a blow to the image of the central bank serving as an impartial and independent agency charged with maintaining stability and pricing and employment.
"Chairman Powell, what immediate actions have you taken to ensure the impartiality of the Fed and what systems that are in place failed here and how do you plan to fix them going forward?"
Powell: "Our need to sustain the public's trust is the essence of our work. We want the public to understand that we work for all Americans. So we don't like to be having these concerns raised. It's really something that's really very concerning.
Please go to Wall Street on Parade to read more.
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If you want to hone your intellectual skills (s-kill-s) on how the fed and central banks operate, sharpen them on this:
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