Former Federal Reserve Governor Disclosed Stock Trades That Breached Central Bank Ethics Rules

Adriana Kugler, who resigned from the Board of Governors of the Federal Reserve on August 8, reported multiple stock transactions for 2024 that conflict with the Fed’s trading restrictions, according to a review released by the U.S. Office of Government Ethics (OGE). The findings stem from information the central bank forwarded to its inspector general earlier this year.

The OGE report shows that Kugler listed more than a dozen individual stock trades in her 2024 financial disclosure. Several of those trades occurred during blackout periods surrounding meetings of the Federal Open Market Committee (FOMC), when Fed officials are barred from trading most securities. Others involved single-company stocks, which Federal Reserve rules prohibit for senior policymakers.

Transactions flagged by ethics officials

Among the securities cited were shares of Southwest Airlines, Apple, Caterpillar, Fortinet, Palo Alto Networks and Cava Group. The largest individual transaction was an Apple stock purchase in April 2024 valued between $100,000 and $250,000. All told, Kugler’s filings show:

• A sale of Palo Alto Networks shares worth roughly $50,000 – $100,000 in March 2024, within days of a scheduled FOMC meeting.
• A purchase of Cava Group shares valued between $1,000 and $15,000 in the same month, also close to that FOMC session.
• A second Cava Group purchase, for the identical dollar range, in April 2024.
• A sale of Southwest Airlines shares between $15,000 and $50,000 during the blackout window ahead of the FOMC meeting that began on April 30.

Federal Reserve policy defines the blackout as the period beginning roughly ten days before each of the eight regular FOMC meetings and ending one day after a meeting concludes. During that time, covered officials may not buy or sell individual securities.

Fed rules tightened after prior controversies

The central bank adopted stricter ethics standards in 2022 following public criticism of trades executed by several top officials during the pandemic. The updated framework bars governors, reserve bank presidents and senior staff from purchasing individual stocks, corporate bonds or cryptocurrencies. Permitted investments are limited to diversified vehicles such as mutual funds or exchange-traded funds.

Under the rules, any allowed personal trade requires 45 days’ advance notice, written approval, and public disclosure within 30 days after execution. By eliminating single-company exposure and tightening timelines, the Fed sought to reduce the risk that monetary policy decisions could be—or appear to be—used for personal gain.

The OGE report notes that some of Kugler’s 2024 trades were initiated by her spouse without her knowledge. It also states that the spouse did not intend to contravene Fed guidelines. Although unintentional factors may be considered during internal reviews, the transactions still fall outside permitted activity and therefore constitute technical violations.

Next steps and possible ramifications

The ethics office did not indicate whether additional investigation or disciplinary measures will follow. The Federal Reserve’s inspector general could recommend actions ranging from a formal reprimand to referral for civil penalties, depending on its assessment. No timeline for a final determination was provided.

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Unlike officials who remain in government service, Kugler is no longer subject to removal or suspension by the Fed. However, regulators often pursue post-employment accountability to uphold confidence in institutions that play a central role in financial markets. Monetary policy announcements routinely move prices of stocks, bonds and currencies, underscoring the importance of strict conflict-of-interest safeguards.

Kugler, an economist and former World Bank executive, joined the Board of Governors in 2023. Her departure in August 2025 came without public explanation. With her seat vacant, the seven-member board currently has an open slot that will require nomination by the president and confirmation by the Senate.

Broader context on ethics oversight

The OGE, an independent agency, oversees compliance with ethics statutes across the executive branch. Its mandate includes reviewing senior officials’ financial filings and issuing guidance on conflicts of interest. More information on federal ethics standards is available through the agency’s official website.

The Fed’s enhanced trading rules place it among the more restrictive agencies in Washington. Observers have argued that such limitations help preserve the credibility of monetary policy, especially when the central bank’s rate decisions can have immediate and widespread market effects.

Neither the Federal Reserve nor Kugler responded publicly to the OGE findings by the time of publication.

Crédito da imagem: Associated Press