Richmond Fed president resigns

Published April 4, 2017 by Robert Powell, III

The president of the Federal Reserve Bank of Richmond resigned Tuesday after acknowledging a role in confidential Fed information being leaked to a market analyst more than four years ago.

Jeffrey Lacker released a statement through his attorney saying the leak resulted inadvertently from a conservation he had with an analyst for Medley Global Advisors, a market intelligence firm, in October 2012.

Lacker said in his resignation statement that he failed to disclose fully the details of his conversation in subsequent federal investigations into the leak until 2015.

The Richmond Fed released a statement saying, “Once our Bank’s Board of Directors learned of the outcome of the government investigations, they took appropriate actions.”

“The Federal Reserve places a high priority on safeguarding information. We expect every employee to comply with all relevant policies and procedures, as well as our standards of conduct,” the bank’s statement said.

Lacker's attorney, Richard Cullen of McGuireWoods LLP in Richmond, said in a statement, “We have been told that the investigations are over and there will be no charges against Dr. Lacker.”

Lacker had announced earlier this year that he planned to retire as president of the Richmond Fed in October. He became president in 2004.

The Richmond Fed said that First Vice President Mark Mullinix is serving as its acting president. A presidential search was already underway in anticipation of Lacker’s retirement in October.

The New York Times reported that in October 2012 Medley Global notified its clients that the Fed would begin a new round of Treasury purchases at its December meeting.

In his statement, Lacker said he did not volunteer that information to the analyst but failed to end the conversation when the subject was brought up.

“During that October 2, 2012 discussion, the Analyst introduced into the conversation an important non-public detail about one of the policy options considered by participants prior to the meeting,” Lacker said.

“Due to the highly confidential and sensitive nature of this information, I should have declined to comment and perhaps have ended the phone call. Instead, I did not refuse or express my inability to comment and the interview continued … When Medley published a report by the Analyst the following day, October 3, 2012, it contained this important detail about one of the policy options and I realized that my failure to decline comment on the information could have been taken by the Analyst, in the context of the conversation, as an acknowledgment or confirmation of the information,” he said.

“I deeply regret the role I may have played in confirming this confidential information and in its dissemination to Medley’s subscribers,” Lacker said. “In this episode, as in all of my communications with analysts, journalists and the public, it was never my intention to reveal confidential information.”