Atlanta Fed's Bostic Violated Trading Rules, Office of Inspector General Says

By Connor Hart

Raphael Bostic, president of the Federal Reserve Bank of Atlanta, violated Federal Open Market Committee rules and Reserve Bank policies, according to a report released by the central bank's Office of Inspector General.

Bostic "created an 'appearance of acting on confidential FOMC information' under the FOMC blackout rule and an 'appearance of a conflict of interest' that could cause a reasonable person to question his impartiality" under the Atlanta Fed's code of conduct, the report said.

An investigation, requested by Board Chair Jerome Powell, into Bostic's trading activities found that he breached the FOMC's blackout and trading preclearance rules, as well as the Reserve Bank's disclosure statement and prohibited holdings policies.

Bostic, in breaching these rules and policies, had securities transactions executed on his behalf during multiple blackout periods; didn't initially and accurately report certain securities transactions; held U.S. Treasury bonds or notes in excess of the $50,000 threshold; and didn't execute trades in accordance with what he had submitted in the preclearance system, the report said.

Federal Reserve Bank of Atlanta Board Chair Claire Lewis Arnold said "we take these issues seriously and the full board will meet to carefully discuss the report's details further."

Bostic last October said he had improperly disclosed financial transactions covering his five years leading the bank because he incorrectly interpreted policies governing personal investments.

His statement came after amended disclosures showed that dozens of sales or purchases of mutual funds and other investment vehicles hadn't previously been disclosed, and that more than 150 of those transactions had settled on dates when they weren't allowed because of restrictions around sales or purchases before and after Fed policy meetings.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

September 11, 2024 15:41 ET (19:41 GMT)

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