Fed Kugler dirt: Filings show Kugler made dozens of banned trades before key Fed meetings

Fresh ethics filings show the trading violations that pushed Adriana Kugler out of the Fed were far broader and closer to key policy dates than previously known.

The Wall Street Journal (gated) with the very dirty story. In summary:

Former Federal Reserve Governor Adriana Kugler is facing intensified scrutiny after newly released ethics filings revealed dozens of stock trades that breached the Fed’s strict personal-trading rules. The disclosures, published Saturday by the Office of Government Ethics, show that internal ethics officers refused to certify her compliance and referred the matter to the Fed’s Office of Inspector General.

Kugler resigned on August 1 and missed the July 29–30 FOMC meeting, with the Fed citing a personal matter. Her exit came as her financial-disclosure paperwork was nearing completion.

The new filings point to at least a dozen prohibited trades conducted in 2024 — some just days before key FOMC meetings — covering names such as Cava Group, Southwest Airlines, Apple, and Caterpillar. Many mirrored the pattern of earlier violations she disclosed last year, which she said were conducted accidentally by her husband.

The 2024 trades again breached two key Fed restrictions:

• No individual-stock transactions

• Absolute blackout periods ahead of FOMC meetings

Examples include Cava stock bought on March 13, one week before the March FOMC meeting; sold on April 5; repurchased April 23; and sold again May 15. Another flagged transaction: Southwest Airlines stock sold the day before the April–May FOMC meeting.

Her latest filing reiterated that “certain trading activity was carried out by Dr. Kugler’s spouse” and without intent to violate any rules. Kugler did not comment.

The episode is particularly sensitive given Fed Chair Jerome Powell’s 2022 crackdown on personal trading following the 2021 controversies that forced two regional Fed presidents to resign. Before the July 2024 meeting, Kugler sought, and was denied, a waiver to attend despite the violations.

The disclosures also show she accepted over $41,000 in pro bono legal services, adding another layer of scrutiny as the watchdog review proceeds.

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While the case doesn’t alter the Fed’s near-term policy path, it risks reopening debate over the central bank’s credibility and could intensify congressional scrutiny of Fed governance and ethics standards.