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From Banking and Finance Law Daily, April 4, 2017

Lacker out at Richmond Fed, admits violating FOMC confidentiality policies

By Richard A. Roth, J.D.

Federal Reserve Bank of Richmond President Jeffrey Lacker has resigned after admitting that he implicitly confirmed "highly confidential and sensitive" information about Federal Open Market Committee deliberations for an analyst employed by Medley Global Advisors. According to Lacker’s letter of resignation, in an Oct. 2, 2012, telephone conversation, the analyst raised "an important non-public detail" about one of the policy options discussed at the FOMC’s September meeting, and Lacker did not tell the analyst he could not comment. A report published by Medley the next day mentioned that detail, and Lacker says he then realized the analyst had interpreted his failure to refuse to comment as a confirmation.

Lacker’s letter also says that he should have reported to the FOMC that the analyst had the information but failed to do so.

Moreover, the letter concedes that Lacker failed on two subsequent occasions—a Dec. 6, 2012, questionnaire and a Dec. 10, 2012, interview—to tell the FOMC’s general counsel that the analyst had asked about the information. In fact, he did not disclose that fact until a 2015 interview with federal law enforcement officials.

Lacker’s resignation has immediate effect. He previously had announced his intent to retire from the Richmond Fed in October of 2017.

Official responses. The Richmond Fed and the Federal Reserve Board issued statements asserting the importance of maintaining the confidentiality of information but saying little else. First Vice President Mark Mullinix will be the Richmond Fed’s acting president until a replacement for Lacker is selected.

The Fed said that it fully cooperated with the investigation and that "We appreciate the diligent efforts made to bring this matter to its conclusion." However, Lacker admitted only that he inadvertently confirmed information the analyst already had. This seems to leaves unanswered the question of the original source of the information.

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