The chairman of the Federal Reserve bank of Atlanta has become the latest central bank figure to be involved in a major trading scandal, providing new proof that our institutions are rife with corruption.
According to The Wall Street Journal, Atlanta Fed president Raphael Bostic, the first black, openly gay chief of the bank, revealed in an amended disclosure on Friday that he had failed to previously disclose dozens of sales and/or purchases of mutual funds and other investment vehicles, making him the latest Fed official to have been involved in illegal trading. Making matters worse, more than 150 of the transactions were settled on dates when they were not allowed because they occurred during blackout periods — before and after Fed policy meetings. What’s more, the WSJ reported, last year Bostic held more than $50,000 in Treasury securities, which exceeded the then-allowable limit on such holdings for Federal Reserve officials.
But his excuse is what really takes the cake: He claimed all of that activity was “inadvertent” because he simply did not have a grasp of the regulations:
Mr. Bostic said the lapses were due to his flawed interpretation of central bank policies. He said he had sought to correct his filings and overhaul how he manages his personal accounts “as soon as I became aware that my financial reporting did not meet the expressed or implicit expectations necessary to maintain the public’s trust.”
“At no time did I knowingly authorize or complete a financial transaction based on nonpublic information or with any intent to conceal or sidestep my obligations of transparent and accountable reporting,” he claimed.
The Federal Reserve, meanwhile, said that Chairman Jerome Powell had asked the central bank’s inspector general to look into the matter, which is essentially punting the football because the IG has no authority to file or even press any charges, only ‘make recommendations.’
“We look forward to the results of their work and will accept and take appropriate actions based on their findings,” said a Fed spokesperson.
Meanwhile, Bostic’s behavior comes after “two Fed presidents resigned last year after financial disclosures showed they had been trading extensively in individual stocks in 2020, a period in which the Fed engaged in extraordinary market interventions as a result of the coronavirus pandemic,” the WSJ reported.
What’s more, it’s not as though Powell didn’t try to intervene and do the right thing after last year’s scandalous trading fiasco by the two Fed presidents. A year ago, he introduced broad personal investment restrictions on senior officials and they took effect earlier this year, the WSJ reported. Bostic’s rule-breaking was discovered by Fed ethics officials in Washington, D.C., during their review of disclosures by central bank officials.
Naturally — because this is what government officials do — Elizabeth Smith, the chairwoman of the Atlanta Fed board, said that Bostic’s explanation has been accepted by the directors who went on to express ‘confidence’ that he had not tried to profit from any private policy-setting discussions (though he made in excess of 150 transactions during that disallowed period of time — not just a couple here and there).
“We are satisfied with his revised financial disclosures and the changes he has made in managing his investments,” Smith said in a statement released Friday, according to the WSJ. “The board is also satisfied that President Bostic has established procedures to ensure that future violations do not occur.”
“I recognize it is my responsibility to understand and abide by every obligation of this office,” Bostic added in his letter explaining his ‘lapses.’ He also said that he made an earlier decision not to monitor trades, as if that’s believable.
Why isn’t Bostic resigning? Is it because of his skin color and sexual orientation? Does he get a pass?
The problem here isn’t that another federal official was caught profiting illicitly. It’s that he won’t be punished, as usual, meaning these kinds of violations will only continue to occur.
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