Raphael Bostic, president and CEO of the Federal Reserve Bank of Atlanta, violated multiple internal trading rules, including blackout periods, disclosure requirements, holding limits, and trading preclearance policies, according to a report by the Federal Reserve’s internal watchdog. However, the report noted that Bostic did not trade based on confidential information.

Atlanta Fed's Bostic violated trading rules : Violations and Findings

The report, issued by the Office of the Inspector General (OIG) for the Federal Reserve Board of Governors, concluded that Bostic’s actions created "an appearance of acting on confidential information" and "an appearance of a conflict of interest" under the Atlanta Fed’s code of conduct. Between March 2018 and March 2023, Bostic’s third-party investment manager executed 154 trades in violation of the Federal Open Market Committee’s (FOMC) blackout rules, which prohibit trading around interest rate-setting meetings to avoid even the appearance of insider trading.

Bostic claimed that he structured his investments so neither he nor his financial advisors could directly influence trades. However, the OIG found that Bostic knew trades could occur during blackout periods and failed to prevent them, thus violating the blackout rule.

Atlanta Fed's Bostic violated trading rules : Disclosure Omissions

The investigation, which began in October 2022 at the request of Federal Reserve Chair Jerome Powell, followed Bostic’s correction of financial disclosure forms dating back to the start of his tenure in 2017. The omissions involved trades in his managed accounts, including some made during restricted periods. The OIG report also found Bostic exceeded the Reserve Bank’s $50,000 cap on U.S. Treasury bonds and notes and twice violated a preclearance rule by not executing trades as described.

In one case, Bostic precleared the purchase of $2,370 worth of mutual fund shares but mistakenly bought 2,370 shares worth nearly $40,000.

Responses and Ongoing Review

A spokesperson for the Federal Reserve confirmed that the Board is reviewing the OIG’s findings. The Atlanta Fed has not yet commented on the report. Bostic has led the Federal Reserve Bank of Atlanta since 2017, overseeing the Sixth Federal Reserve District, which includes Alabama, Florida, Georgia, and parts of Louisiana, Mississippi, and Tennessee.