A former Federal Reserve governor who retired in August listed several stock trades in her financial disclosure documents for 2024 that violated the central bank’s ethics rules.
The transactions are outlined in a report released Saturday by the U.S. Office of Government Ethics, which reviewed Adriana Kugler’s financial disclosures after the Fed referred them to its inspector general earlier this year.
The central bank’s decisions on interest rates and bank regulations can cause significant swings in the prices of stocks, bonds and other securities.
As such, Fed officials are barred from investing in individual stocks, bonds or cryptocurrencies, although they are allowed to invest via diversified investments such as mutual funds. They must provide 45 days’ notice of any trade and secure approval of such trades. And they must provide public notice of any trades made in the previous 30 days.
It’s also forbidden for Fed officials to engage in financial transactions during the blackout period around the eight times during the year when the Fed’s policymaking committee meets. That blackout period is roughly 10 days before a Fed meeting and one day after the meeting ends.
Kugler also disclosed another Cava Group stock purchase in April of between $1,000-$15,000 and the sale of between $15,000-$50,000 in Southwest Airlines stock during the blackout period before the Fed meeting that started April 30, 2024.
The report notes that “certain trading activity was carried out by Dr. Kugler’s spouse, without Dr. Kugler’s knowledge and she affirms that her spouse did not intend to violate any rules or policies.”
Kugler, who did not provide a reason for stepping down in her resignation letter, was appointed to the Fed’s seven-member board of governors by former President Joe Biden in September 2023. She was the first Hispanic Fed governor. Prior to joining the Fed, she was a professor at Georgetown University and was the U.S. representative to the World Bank. Kugler returned to the Georgetown faculty in the fall.
