The U.S. Federal Reserve will no longer allow officials to trade stocks and bonds and will limit all trading activity under new rules announced last week.
“These tough new rules raise the bar high in order to assure the public we serve that all of our senior officials maintain a single-minded focus on the public mission of the Federal Reserve,” Fed chair Jerome Powell said in a 21 October statement.
The Fed’s review and toughening of its ethics rules for top officials followed a scandal in which two Fed bank presidents were found to be actively trading stocks and bonds while influencing, or voting on, Fed policies (“Bankster Bandits Get Richer Playing the Inside Track,” 14 Sep 2021.)
Robert Kaplan, president of the Federal Reserve Bank of Dallas, made 24 stock trades, each worth $1 million or more, in 2020, and bought bonds of companies that the Fed later included in its own bond purchases as part of its economic rescue effort.
Eric Rosengren, president of the Federal Reserve Bank of Boston, also made personal trades of a questionable nature during the year.
After their activities came to light, both quickly resigned, saying that their behavior was allowed under Fed ethics standards. 
Powell immediately ordered a review of the Fed’s rules governing officials’ financial behavior.
Under the new rules, Fed governors, senior staff, and regional bank presidents will be allowed only to invest in diversified products such as mutual funds and are barred from trading in instruments of individual companies.
The nonprofit watchdog Revolving Door Project has sent a letter to Powell, urging him to direct the Fed’s inspector general “to cooperate with other federal agencies in investigating whether these trading activities [of Kaplan and Rosengren] violated criminal statutes on insider trading or improper use of confidential information.”
When news of Kaplan’s trades broke, Senator Elizabeth Warren sent letters to each of the 12 Fed regional bank presidents, urging them to forbid stock ownership or trading by their senior officials.
TRENDPOST: As we noted when this scandal broke, the game is rigged—and it still is. 
The wealthy and their network of spouses, friends, accountants, lawyers, and cronies always will find a way to game the system and make out well for themselves while adhering to the letter of the rules but ignoring the intent. Again, as the great comedian George Carlin said, “It’s one big club, and you ain’t in it.”

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