The president of the Virginia Federal Reserve won’t face charges after admitting his part in leaking information about the government’s fiscal policy plans — information that was then shared with a select group of investors.
Jeffrey Lacker, 61, had been the president and CEO of the Federal Reserve Bank of Richmond since 2004. Along with the written admission of guilt he published Tuesday, he also announced his immediate resignation.
“I apologize to my colleagues and to the public it has been my privilege to serve,” Lacker wrote. “I have always strived to maintain the appropriate balance between transparency and confidentiality, but I regret that in this instance I crossed the line to confirming information that should have remained confidential.”
Essentially, back in 2012, someone called Lacker with data suggesting the Fed was going to continue its bond-buying policies — the oft-mentioned “quantitative easing.” Lacker claims he inadvertently confirmed that analysis.
Whether he meant to or not, Lacker admits in his letter that once the information was published, he realized what he’d done and chose to remain silent, all while the hedge fund players at Medley Global Advisors enjoyed the heads up he had given them.
In fact, he admits he intentionally withheld the information in the initial 2012 investigation into the leak. It was much later, in a separate investigation by the F.B.I., that Lacker came clean about what he knew.
In the letter, Lacker says he understands he violated the Fed’s two primary confidentiality policies, one of which “prohibits providing any profit-making person or organization with a prestige advantage over its competitors.”
No worries, though. Lacker’s attorney announced Tuesday that the investigation into the former Fed president is closed, and he’s now free to drift off into retirement.
“Dr. Lacker has cooperated with the Department of Justice,” attorney Richard Cullen said in a statement, “and has been informed that no charges will be brought and that the investigation as to him is complete.”
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