Richmond Fed’s Jeffrey Lacker Is Resigning Over Leaks With Medley Analyst

April 4, 2017, 5:58 PM UTC

Richmond Federal Reserve President Jeffrey Lacker abruptly left the U.S. central bank on Tuesday after admitting a conversation he had with a Wall Street analyst in 2012 may have disclosed confidential information about Fed policy options.

The 2012 leak had triggered a criminal investigation and came as the Federal Reserve was laying the groundwork for a massive bond buying package that it rolled out later in the year. The information was disclosed by Medley Global Advisors one day ahead of the publication of the central bank’s own minutes from its September meeting.

Lacker said in January he would retire in October. But on Tuesday he said he decided to make his departure effective immediately because he had confirmed confidential information to Medley. It was not clear if Lacker was pushed out of his post although the Richmond Fed said in a statement it took “appropriate actions” after learning the outcome of government investigations into the leak.

Lacker said he did not fully disclose details his 2012 discussion with a Medley analyst when he was interviewed by a Fed lawyer that year. He did, however, say in a 2015 interview with the Federal Bureau of Investigation that his discussion with the Medley analyst included confidential information.

Lacker gave no reason for the time gap between the 2015 interview and his statement on Tuesday.

The interview with the FBI also involved the United States Attorney’s Office for the Southern District of New York, the Office of the Inspector General of the Federal Reserve Board and the U.S. Commodity Futures Trading Commission.

“I deeply regret the role I may have played in confirming this confidential information,” Lacker said in a statement, adding it had “never” been his “intention to reveal confidential information.”

Lacker said he may have broken a policy “which prohibits providing any profit-making person or organization with a prestige advantage over its competitors.”

He did not say he provided the analyst with details about the Fed’s policy options. Rather, he said the Medley analyst brought up confidential Fed information in their conversation.

“I should have declined to comment and perhaps have ended the phone call. Instead, I did not refuse or express my inability to comment and the interview continued,” he said.

The Medley report triggered furor in the U.S. Congress and became a source of friction between the central bank and lawmakers, leading to a criminal investigation.

In May 2015, then Financial Services Committee chair Jeb Hensarling, a Texas Republican who has called for stricter Congressional oversight of the central bank, subpoenaed Fed documents and communications related to the leak.

Fed Chair Janet Yellen told Hensarling in a letter that month that she had a meeting with Medley in June 2012, but did not disclose any confidential information.

The Richmond Fed is one of 12 regional reserve banks that are part of the U.S. central bank. They process payments and help regulate banks, while their presidents take turns as members of the Fed committee that sets interest rates.

The Fed’s policy on external communications acknowledges the importance of Fed staff meeting with members of the public to gather information and help explain policy. However there are strict guidelines.

“Staff will strive to ensure that their contacts with members of the public do not provide any profit-making person, firm, or organization with a prestige advantage,” the policy states.

This story has been updated throughout.

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