Trends Journal has written before about the Bankster Bandits at the Federal Reserve, and their apparent flouting of their own bank’s ethical guidelines and of ethics in general, particularly with regard to insider trading and cronyism with the very institutions they are supposed to regulate; see, for example, “BANKSTER BANDITS GET RICHER PLAYING THE INSIDE TRACK” (14 Sep 2021), “FED ETHICS? FU!” (21 Sep 2021) and “CRIMINALITY IN HIGH FINANCE: THE BEAT GOES ON” (9 Nov 2021).
Now comes an article in Wall Street on Parade, appearing 11 November, that exposes apparent corruption at the Federal Reserve not just at the level of regional presidents or the chairman himself—see “FEDERAL RESERVE’S CHAIRMAN COMES UNDER SCRUTINY” (26 Oct 2021)—but far deeper and more pervasive, with the Fed itself apparently throwing up roadblocks to an investigation of one its officer’s misdeeds.
TRENDPOST: Wall Street on Parade is an independent financial news site, not affiliated with nor beholden to any Wall St. firm or bank, operated and produced by Pam and Russ Martens. They are Wall St. gadflies; Pam Martens is a 21-year veteran of Wall St. who, for the past 10 years, has been a critic of the financial industry’s corrupt practices and its “private justice system.” Trends Journal includes this background because the reporters are part of the story.
Robert Kaplan was the president of the Dallas region of the Federal Reserve; he resigned on 27 September amid a scandal over trades he had made while in office. Those trades, valued at $1 million or more, were done via a type of futures contract, used by hedge funds and day traders, that “affords a much larger window of opportunity” for those who “might want to trade on insider information.”
Such trading is expressly prohibited by the Dallas Fed’s Code of Conduct, according to which Kaplan should have divested himself of the securities in question.
Kaplan had worked, for 22 years, at the global investment firm Goldman Sachs, which is supervised by the Federal Reserve; he had risen to Vice Chairman there when he left to join the Federal Reserve. His financial disclosure forms indicated that he had maintained a trading relationship with his former firm; see “FED’S KAPLAN SIGNALED CONFLICTS IN DISCLOSURE FORM” (21 Sep 2021), which also details the mechanics of his insider trading.
When Pam and Russ Martens inquired—via e-mails to five media relations staffers—whether Kaplan had used Goldman Sachs in his trades, all five declined to answer. Next, the Communications Team at the Dallas Fed refused to supply the dates of Kaplan’s trades, information which would have helped confirm his insider trading and was long overdue to be made public. The Dallas Fed also refused The Wall Street Journal’s request for the same information.
Next, the Martenses requested expedited release of information under the Freedom of Information Act. Margaret McCloskey Shanks, the Fed’s Chief FOIA Officer and Deputy Secretary of the Fed’s Reserve Board of Governors, at first promised priority treatment of their request, and even supplied an update that compliance would be within the statutory 20 day time limit.
When the deadline came, however, they received an email from the “Information Disclosure Section” of the “Board of Governors of the Federal Reserve System,” citing an obscure (and legally questionable) provision in the Justice Department’s Guide for responding to FOIA requests as a reason to postpone the deadline, effectively “stonewalling” the FOIA request. The information sought would likely have removed “allegedly” from the accusations against Kaplan.
Pointing out that the Dallas Fed’s General Counsel, Sharon Sweeney, is still employed despite having signed off on Kaplan’s financial disclosure reports, Pam and Russ Martens conclude that “It’s time for Congress to meaningfully restructure the Federal Reserve, ending its myriad abuses of the public’s right to know and its chronic failures to supervise its own officials as well as the mega banks on Wall Street.”
TRENDPOST: What can we add, except to repeat Gerald Celente’s favorite quote from George Carlin, “It’s a big club, and you ain’t in it!”? If you are in it, however, you can rest assured your colleagues will give you every benefit of their “private justice system,” circling their wagons and using every tactic they can muster—even thumbing their noses at their own supposed “ethical standards” and the Freedom of Information Act—to protect your sorry, privileged, insider-trading ass.