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By Jonnelle Marte
(Reuters) – Two Federal Reserve officials said on Thursday they would sell their individual stocks by the end of the month to deal with the appearance of conflicts of interest.
Dallas Fed Chairman Robert Kaplan and Boston Fed Chairman Eric Rosengren have issued statements saying they will invest the proceeds of those sales in diversified index funds and cash savings and will not trade not these accounts while they were in office.
The announcements come after officials came under scrutiny of transactions they made last year, according to their financial disclosure forms.
In the forms, first reported by The Wall Street Journal https://www.wsj.com/articles/dallas-feds-robert-kaplan-was-active-buyer-and-seller-of-stocks-last- year-11631044094, Kaplan revealed that he held a total of 27 investments in individual stocks, funds or alternative assets valued at over $ 1 million each. He also made sales or purchases of at least $ 1 million in 22 shares of individual companies or investment funds, the report notes. The transactions included Apple, Amazon, and General Electric.
“While my financial transactions during my years as chairman of the Dallas Fed were in line with the Federal Reserve’s ethical guidelines, to avoid even the appearance of any conflict of interest, I decided to change my personal investment practices, ”Kaplan said in a statement.
A separate report from Bloomberg https://www.bloomberg.com/news/articles/2021-09-08/fed-official-who-warned-on-real-estate-was-active-reit-trader?sref=HFh69AJb pointed out that Rosengren has stakes in four separate real estate investment trusts and has made several purchases and sales in those and other investments while being a vocal critic of risks in the US real estate market.
In a similarly worded statement, Rosengren said his personal investments and transactions comply with the Fed’s ethical guidelines.
“Unfortunately, the appearance of such authorized personal investment decisions raised some questions, so I made the decision to divest these assets to underscore my commitment to the Fed’s ethical guidelines,” said Rosengren, who reached the compulsory retirement age in June 2022.
(Reporting by Jonnelle Marte and Ann Saphir; editing by Leslie Adler)
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