Ethics Report Reveals Former Fed Governor Adriana Kugler Violated Trading Rules Before Abrupt Resignation

A new report from the U.S. Office of Government Ethics (OGE) has confirmed that former Federal Reserve Board Governor Adriana Kugler repeatedly violated the central bank’s strict trading rules during her tenure — conduct that ultimately led to her unexpected departure last year.

Kugler, who joined the Fed in September 2023 under President Joe Biden’s appointment, resigned suddenly in August 2024 without explanation. The OGE report, released Saturday, provides the clearest picture yet of the internal concerns that had been mounting for nearly a year.

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Improper Trades and Ethics Flags

According to the OGE, Kugler or her spouse executed several transactions that breached Federal Reserve ethics rules, including:

• Purchases of individual company stocks, which senior Fed officials are prohibited from trading

• Trading during “blackout periods,” the restricted windows before and after Federal Open Market Committee (FOMC) meetings, when interest rate decisions can influence market prices

The report lists purchases involving Apple, Southwest Airlines, Caterpillar, and Cava Group, all made while Kugler was participating in FOMC meetings and privy to sensitive economic information.

Kugler has stated that several trades were executed by her husband, immigration attorney Ignacio Donoso, without her knowledge or intent to violate policy. She disclosed these issues to internal ethics officials, who later referred the matter to the Fed’s independent Office of Inspector General (OIG).

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Powell Denied Waiver, Triggering Her Exit

Multiple Fed officials told CNBC that Chair Jerome Powell denied Kugler’s request for a waiver after reviewing disclosure forms showing “impermissible holdings.” That rejection prevented her from participating in the July 2024 FOMC meeting — a red flag widely noticed within the central bank.

Kugler had already been working for months with ethics compliance officers to resolve concerns dating back to September 2024, including obtaining an earlier extension to file annual disclosures. But Powell’s denial made a second delay impossible, leading Kugler to announce her resignation days later for an August 8 effective date.

A September 11 disclosure, filed shortly after her departure, was not certified by ethics staff due to the unresolved violations.

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Pro Bono Legal Services Raise Questions

The new OGE report also reveals that Kugler received more than $41,000 in pro bono legal assistance from Arnold & Porter, though such services do not necessarily violate ethics rules when properly disclosed. Both Kugler and Donoso have been approached for comment.

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Part of a Larger Pattern at the Fed

Kugler’s case is the latest ethics controversy to strike the Federal Reserve in recent years. In 2022, the Fed implemented sweeping restrictions banning officials from holding individual stocks, bonds, and cryptocurrencies, following scandals involving former regional presidents Eric Rosengren and Robert Kaplan.

Although both men were cleared of legal wrongdoing, their trades during the early months of the Covid-19 pandemic raised serious concerns about whether policymakers had access to market-moving information.

The Fed’s inspector general has issued several investigations since then, including a 2024 finding that Atlanta Fed President Raphael Bostic violated trading rules before announcing his upcoming retirement.

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A Vacancy Filled Quickly

Kugler’s unexpected departure opened the door for then-President Donald Trump to appoint economist Stephen Miran to serve the remainder of her term on the Board of Governors. Miran, who had been serving as chair of the White House Council of Economic Advisors, stepped aside temporarily to take on the role. His term ends January 31.

Kugler has since returned to her academic position at Georgetown University’s McCourt School of Public Policy, where she previously served as a professor of economics and public affairs.