Former Federal Reserve Governor Adriana Kugler abruptly resigned after Chair Jerome Powell refused to grant her a waiver to address financial holdings that ran afoul of the central bank’s ethics rules, according to a Fed official.
Kugler also faced a probe by the Fed’s internal watchdog related to her recent financial disclosures before stepping down in August, according to a document released Saturday.
Fed ethics officials declined to certify Kugler’s latest disclosures, which were posted on the website of the Office of Government Ethics, and referred the matter to the board’s inspector general, the document showed. The disclosures revealed details related to financial activity that appeared to violate the Fed’s internal ethics rules.
Kugler announced on Aug. 1 that she would resign effective Aug. 8, without citing a reason and after she missed the central bank’s July 29-30 policy meeting. At the time, the Fed said her absence from the meeting was due to a “personal matter.”
Ahead of that meeting, Kugler requested a waiver to conduct financial transactions to address what the Fed official described as impermissible financial holdings. She discussed that request with Powell, who denied it, according to the official. It wasn’t immediately clear which holdings were involved in that request.
Kugler declined to comment.
In the financial disclosure released Saturday, Fed ethics official Sean Croston said, “Consistent with our standard practices and policies, matters related to this disclosure were referred earlier this year by the Board’s Ethics Office to the independent Office of Inspector General for the Board of Governors of the Federal Reserve System.”
The financial disclosure, which was submitted roughly a month after Kugler’s departure, covered calendar years 2024 and 2025 through her resignation. Top Fed officials are required to submit disclosures annually and after leaving the central bank, and to report periodic financial transactions.
Previous Violations
In periodic financial disclosures during 2024, Kugler acknowledged that she had run afoul of Fed investment and trading rules when her spouse completed four purchases of shares of Apple Inc. and Cava Group Inc.
Those trades violated the central bank’s rules that limit how senior Fed officials, their spouses and minor children invest and trade, including a general prohibition on the purchase of individual stocks.
Kugler said her spouse made the purchases without her knowledge. The shares were later divested and Kugler was deemed in compliance with applicable laws and regulations by the Fed’s designated ethics official, according to the disclosures.
Kugler’s resignation gave President Donald Trump an earlier-than-expected opportunity to fill a slot on the Fed’s board in the midst of his intense pressure campaign urging policymakers to drastically lower interest rates. The opening ultimately went to Trump ally Stephen Miran, who took an unpaid leave of absence from his post as a White House economic adviser and has called repeatedly for rapid rate cuts.
Powell introduced tougher restrictions on investing and trading for policymakers and senior staff at the central bank in 2022. That followed revelations of unusual trading activity during 2020 by several senior officials.
Boston Fed President Eric Rosengren and Dallas Fed chief Robert Kaplan each announced their early retirement after the revelations, with Rosengren citing ill health. The Fed’s internal watchdog ultimately cleared the pair of legal wrongdoing, but chastised them for undermining public confidence in the central bank.
The new rules, which the Fed said at the time were aimed at supporting the public’s confidence in the impartiality and integrity of policymakers, boosted financial disclosure requirements, among other measures.