Media Moves

Coverage: Richmond Fed head Lacker resigns amid leak probe

April 5, 2017

Posted by Chris Roush

Jeffrey Lacker
Jeffrey Lacker

Jeffrey Lacker, the president of the Federal Reserve Bank in Richmond, Virginia, abruptly resigned on Tuesday after he admitted he was the person who leaked confidential information about policy options that the central bank was considering in 2012.

Christopher Condon and Craig Torres of Bloomberg News had the news:

Lacker said during a phone conversation with an analyst from Medley Global Advisors in October 2012 that she brought up an “important non-public detail” about Fed policy makers’ discussions before a meeting, according to a statement emailed by law firm McGuireWoods in Richmond, Virginia, on Tuesday. Due to the confidential and sensitive nature of the information, Lacker said he should have declined to comment or immediately ended the call.

“Instead, I did not refuse or express my inability to comment and the interview continued,” he said.

Lacker, 61, said he also failed to report to the Federal Open Market Committee that the analyst was in possession of confidential FOMC information. The day after, when the analyst published details of one of the policy options in a report for subscribers, Lacker said he realized his failure to comment on the information was seen as a confirmation of it.

“I regret that in this instance I crossed the line to confirming information that should have remained confidential,” Lacker said. “In 2012, my conduct was inconsistent with those important confidentiality policies.”

Jeff Cox of reported that no charges will be brought against Lacker:

Lacker, 61, became president and CEO of the Federal Reserve Bank of Richmond on Aug. 1, 2004. He is a member of the policy-setting Federal Open Market Committee. CNBC has learned that the resignation was negotiated with law enforcement officials. Lacker’s attorney told CNBC no charges will be filed.

Lacker, who was not a voting member of the FOMC this year, previously said he planned to retire in October.

In his letter of resignation, Lacker admitted to speaking to an analyst at Medley Global Advisors regarding the September 2012 Fed meeting. Medley publishes analysis for hedge funds and asset managers and is owned by the Financial Times. Lacker said his actions violated Fed communications policies that prohibit “providing any profit-making person or organization with a prestige advantage over its competitors.”

Lacker said he was asked by an analyst about an “important nonpublic detail” regarding the Federal Open Market Committee’s policy options.

“Due to the highly confidential and sensitive nature of this information, I should have declined to comment and perhaps have ended the phone call,” Lacker said. “Instead, I did not refuse or express my inability to comment and the interview continued.”

Jim Puzzanghera of the Los Angeles Times reports that the leak had initially been reported by ProPublica:

Mark Bialek, the Fed’s Inspector General, said that his office was concluding its investigation into the 2012 leak.

Lacker is an alternate member of the Federal Open Market Committee this year, so his early departure will not affect interest rate decisions. He will be replaced on an interim basis by the bank’s first vice president, Mark Mullinix, while the board continues its search for a replacement.

Lacker’s resignation “draws further negative attention to the Federal Reserve at a time when members of Congress are already sharply critical” of the investigation and the Fed’s policies, said Mark Hamrick, senior economic analyst at, a financial information website.

An October 2012 Medley newsletter reported to subscribers — including hedge funds and money managers — that the Fed was considering increasing the amount of bonds it was buying at the time to stimulate the economy. The newsletter appeared the day before the minutes of the September 2012 meeting were publicly released.

The leak was reported two years later by ProPublica, triggering an internal Fed investigation. Members of Congress from both parties have criticized the Fed for not doing a more thorough investigation, and a broader inquiry by outside officials is taking place.

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