A recent investigation found that the president of the Federal Reserve Bank of Atlanta violated federal investment disclosure requirements. He also exceeded ownership limits on Treasury securities and placed trades on dates that were prohibited because the dates were too close to a Fed policy meeting.
Raphael Bostic has been president of the Atlanta Fed since 2017 – and remains in that position despite the recent discovery of these violations of reporting requirements. He explained that he had merely misinterpreted the policies and never used nonpublic information to make an investment decision. Bostic, a graduate of both Harvard and Stanford universities, explained he mistakenly believed he wasn’t required to make those disclosures because he had hired a third-party investment manager.
My firm has worked for federal officials who were subject to almost identical disclosure requirements and trading restrictions as is Bostic. In every case, our clients were clearly aware that hiring an outside manager had no bearing on their reporting requirements. For a Federal Reserve official to use the excuse “I didn’t know what my investment advisor was doing” is simply beyond belief.
In my opinion, Bostic should have been removed from office. Very publicly, with reports about his removal broadcast on a repeating loop in every office on Capitol Hill. Within the past year, three other Fed officials resigned from office amid trading controversies.
While public pressure mounts on…
