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The Federal Reserve’s inspector general said there was no evidence to substantiate allegations that Fed Chairman Jerome Powell or former Fed Vice Chairman Richard Clarida violated any laws or regulations with their trading activity.
In a July 11 letter to Powell, Mark Bialek, the Fed’s inspector general, said: “We did not find evidence to substantiate the allegations that former Vice Chair Clarida or you [Powell] violated laws, rules, regulations, or policies related to trading activities investigated by our office.”
Powell had requested the independent review last October after the Wall Street Journal reported that Dallas Fed president Robert Kaplan and Boston Fed President Eric Rosengren were active traders.
Allegations of potentially improper trading then spread to Clarida and eventually to Powell.
The inspector general said that it found that Clarida failed to report several trades on his 2019 and 2020 forms. In addition, a trust advisor for the Powell family trust executed five trades during a Fed “blackout period” in December 2019 in order to make funds available to charitable donations.
In these two cases, the inspector general said no further action was needed.
In a statement, Clarida said the report reaffirms his “lifetime commitment to exceeding ethical standards.”
A separate inspector-general investigation of Kaplan and Rosengren, is ongoing. Both have left the Fed.
Clarida also left his post earlier this year shortly before his four-year term expired.
In February, the Fed put in place new investment and trading rules. Earlier this week, Senate Democrats complained the Fed’s new rules don’t have “teeth” because they don’t set standards for disciplinary action or set financial penalties for violators.
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