Federal Reserve Bank of Atlanta President Raphael Bostic's trading and investing broke central bank rules, the Fed's in-house watchdog said on Wednesday.
Bostic created the appearance he acted on confidential information and the appearance of a conflict of interest, in violation of the Atlanta Fed's code of conduct, according to a report by the Office of Inspector General for the central bank.
However, the report said investigators found no evidence that Bostic in reality used inside information about Fed deliberations or had financial conflicts of interest.
The Fed official relied on investment managers and did not have the ability to direct specific trades, the report said.
Bostic "was nonetheless responsible for ensuring that all trades and investments made on his behalf complied with all applicable rules, including the provisions addressing appearance standards."
Trades on Bostic's behalf took place during prohibited "blackout" periods around Federal Open Market Committee meetings 154 times between March 2018 and March 2023, investigators found.
He also filed inaccurate disclosure forms, held more Treasury securities than allowed and twice executed trades that were different than those that he sought central bank clearance for.
In a statement after the release of the report, the Atlanta Fed, on behalf of its board of directors said, "We take these issues seriously and the full board will meet to carefully discuss the report's details further."
Separately, the U.S. central bank's Board of Governors is reviewing the report, a spokesperson for the Washington-based body said.
Bostic told investigators he was unaware his trades occurred during prohibited periods because he relied on money managers. The IG said Bostic did not review monthly statements on his investments and could have avoided violations.
The IG report on Bostic's finances is the third and likely last about investing and trading by current and former Fed policymakers.
Robert Kaplan, who headed the Dallas Fed, and Eric Rosengren, who ran the Boston Fed, retired soon after.
Fed Chair Jerome Powell and Richard Clarida, the then-Fed vice chair, also faced questions about their investing activities, though both were later cleared of wrongdoing.
The inspector general earlier this year said Kaplan and Rosengren didn't break rules but their activities created the appearance of a conflict of interest.
The report on Bostic had long been expected given he had already acknowledged in filings errors in his financial disclosures.
The trading controversy was a blow to the Fed's reputation, fueling questions as to whether policymakers were benefiting financially from their interest rate decisions.
The central bank in 2021 sharply tightened the rules on investing by policymakers and top staff.
