Federal Reserve tightens ethics rules to ban active trading by senior officials

Brian Cheung

Yahoo Business News

Originally posted 21 OCT 21

The Federal Reserve on Thursday said it will tighten its ethics rules concerning personal finances among its most senior officials, the latest development in a trading scandal that has led to the resignation of two policymakers.

The central bank said it has introduced a “broad set of new rules” that restricts any active trading and prohibits the purchase of any individual securities (i.e. stocks, bonds, or derivatives). The new restrictions effectively only allow purchases of diversified investment vehicles like mutual funds.

If policymakers want to make any purchases or sales, they will be required to provide 45 days of advance notice and obtain prior approval for any purchases and sales. Those officials will also be required to hold onto those investments for at least one year, with no purchases or sales allowed during periods of “heightened financial market stress.”

Fed officials are still working on the details of what would define that level of stress, but said the market conditions of spring 2020 would have qualified.

The new rules will also increase the frequency of public disclosures from the reserve bank presidents, requiring monthly filings instead of the status quo of annual filings. Those at the Federal Reserve Board in Washington already were required to make monthly disclosures.

The restrictions apply to policymakers and senior staff at the Fed’s headquarters in Washington, as well as its 12 Federal Reserve Bank regional outposts. The new rules will be implemented “over the coming months.”

Fed officials said changes will likely require divestments from any existing holdings that do not meet the updated standards.

The info is here.

Sen. Kelly Loeffler Dumped Millions in Stock After Coronavirus Briefing

L. Markay, W. Bredderman, & S. Bordy
thedailybeast.com
Updated 20 March 20

The Senate’s newest member sold off seven figures’ worth of stock holdings in the days and weeks after a private, all-senators meeting on the novel coronavirus that subsequently hammered U.S. equities.

Sen. Kelly Loeffler (R-GA) reported the first sale of stock jointly owned by her and her husband on Jan. 24, the very day that her committee, the Senate Health Committee, hosted a private, all-senators briefing from administration officials, including the CDC director and Anthony Fauci, the head of the National Institute of Allergy and Infectious Diseases, on the coronavirus.

“Appreciate today’s briefing from the President’s top health officials on the novel coronavirus outbreak,” she tweeted about the briefing at the time.

That first transaction was a sale of stock in the company Resideo Technologies valued at between $50,001 and $100,000. The company’s stock price has fallen by more than half since then, and the Dow Jones Industrial Average overall has shed approximately 10,000 points, dropping about a third of its value.

It was the first of 29 stock transactions that Loeffler and her husband made through mid-February, all but two of which were sales. One of Loeffler’s two purchases was stock worth between $100,000 and $250,000 in Citrix, a technology company that offers teleworking software and which has seen a small bump in its stock price since Loeffler bought in as a result of coronavirus-induced market turmoil.

The info is here.

Oceanside council approves its first ethics code

Phil Diehl
San Diego Union Tribune
Originally posted 1 March 20

Facing a public backlash over infighting, campaign contributions and alleged conflicts of interest, the Oceanside City Council unanimously approved its first code of ethics.

“This is a start,” said Councilwoman Esther Sanchez before Wednesday’s vote. The need for a policy is evident from the efforts underway to recall two council members (including herself) and for a referendum to overturn the council’s recent approval of a controversial Morro Hills development project, she said.

“We need to respect each other, and we need to respect the public,” Sanchez said, noting that she too at times has been critical of her fellow council members. “Sometimes it gets personal ... we need to do better.”

Residents said the policy should go further to include more specifics and penalties. Some suggested the city should limit campaign contributions, or not allow council members to vote on projects proposed by developers who contribute to their election campaigns.

The info is here.