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Head Of Federal Reserve's Richmond Bank Resigns Over 'Improper Disclosure'

Jeffrey Lacker, former president of the Federal Reserve Bank of Richmond in Virginia, resigned on Tuesday.
Chuck Burton
Jeffrey Lacker, former president of the Federal Reserve Bank of Richmond in Virginia, resigned on Tuesday.

The president of the Federal Reserve Bank of Richmond has resigned after being investigated for potentially disclosing confidential information to a Wall Street analyst in 2012.

Jeffrey Lacker, who led the bank in Virginia for more than a decade, did not admit to directly revealing information about policy options being considered by the Fed. But he said in his resignation letter that his actions during a phone interview with the analyst were inconsistent with Fed policy.

He said the analyst who called him already knew an "important non-public detail" about the policy options. When the analyst raised that detail, Lacker says, he should have "declined to comment and perhaps ended the phone call," but he did not.

That conversation, with a Medley Global Advisors analyst, happened on Oct. 2, 2012. Reuters has more information about the consequences:

"The next day, Medley Global Advisors unveiled details of a September Fed policy-setting meeting, one day ahead of the publication of the central bank's own record of the discussions.

"At the Fed meeting, officials laid the groundwork for the massive bond-buying stimulus they were to roll out later that year. Early knowledge of that discussion could have given traders an unfair edge."

After Medley's report came out, Lacker said he "realized that my failure to decline comment on the information could have been taken by the Analyst, in the context of the conversation, as an acknowledgment or confirmation of the information."

In his resignation letter, Lacker also said he was first questioned about the conversation more than four years ago, as part of an internal Federal Reserve investigation. At the time, he did not fully disclose what happened. Government investigations continued, and in 2015, Lacker told law enforcement more about his involvement in the conversation.

"I deeply regret the role I may have played in confirming this confidential information," he said in the letter. "It was never my intention to reveal confidential information."

The resignation is effective Tuesday. Lacker's lawyer says the investigation into Lacker is complete and no charges will be brought.

The Bank of Richmond — one of 12 Federal Reserve Banks — said in a statement that the search for a new president was already underway, based on Lacker's previous plans to retire later this year.

The bank did not explicitly say Lacker was forced out, but the statement suggested his departure may not have been voluntary.

"The Federal Reserve places a high priority on safeguarding information. We expect every employee to comply with all relevant policies and procedures, as well as our standards of conduct," the statement said.

"Once our Bank's Board of Directors learned of the outcome of the government investigations, they took appropriate actions."

Copyright 2021 NPR. To see more, visit https://www.npr.org.

Camila Flamiano Domonoske covers cars, energy and the future of mobility for NPR's Business Desk.