Dallas, US
6:52 am, Dec 01
English Español


Fine Print

English Español

Texas Federal Reserve Chairman Resigns After Accusations

Business, Featured, Government

Image by pabradyphoto

The Federal Reserve Bank of Dallas released a statement on Monday, September 27, stating that President and CEO Rob Kaplan will retire from his position on October 8. In recent weeks, Kaplan has come under fire after financial disclosures revealed questionable stock trading practices by several regional chairmen, including Kaplan.

Kaplan is a former Goldman-Sachs executive and has served as the Chairman of the Dallas region since 2016. Annual disclosure reports first reported on by the Wall Street Journal show a troubling pattern of investments in stocks that would be affected by policy decisions at the Fed under Kaplan’s direction.

In a statement, Kaplan denied any wrongdoing in the matter.

“Unfortunately, the recent focus on my financial disclosure risks becoming a distraction to the Federal Reserve’s execution of that vital work. For that reason, I have decided to retire as President and CEO of the Federal Reserve Bank of Dallas, effective Friday, October 8, 2021,” his statement reads.

“During my tenure, I have adhered to all Federal Reserve ethical standards and policies. My securities investing activities and disclosures met Bank compliance rules and standards.”

The disclosure report shows that Kaplan made million-dollar trades in stocks including Apple, Amazon, and Delta Airlines when the Fed was purchasing bonds in these companies. The appearance of impropriety was enough to force both Kaplan and Boston branch President Eric Rosengren to sell their individual stock holdings before September 30.

Jerome Powell, chairman of the Federal Reserve System Board of Governors, thanked Kaplan for his service in a statement.

“We are grateful for Rob’s six years of service as President of the Federal Reserve Bank of Dallas and as a valued colleague in the FOMC,” Powell’s statement reads. “He has been a passionate and forceful public voice on a wide range of issues, including the critical value of early childhood education and literacy.”

Rosengren also announced his retirement from the Boston Fed on Monday. Rosengren’s disclosure showed major investments in four commercial real estate investment trusts after publicly warning investors against those same investments.

Though the disclosure reports will not reveal information likely to reach the level of criminal activity, many observers of the nation’s largest bank say the activity is more evidence of the need to make reforms and provide the public with transparency. The Fed is a public-private organization in which the leadership is largely shielded from public information laws as the acting leadership are not public officials. Advocates of the system have successfully argued that the separation of public and private designations is essential to prevent excessive influence from Washington D.C. or the financial center of New York.

First Vice President Meredith Black has agreed to delay her own retirement to fill in as the interim President. The Board of Directors at the Dallas Fed are responsible for nominating a new president who the Board of Governors must then confirm in Washington appointed by the President of the United States.