Ex-Fed Governor Kugler faced ethics probe before she resigned

(Bloomberg) — Former Federal Reserve Governor Adriana Kugler abruptly resigned after Chair Jerome Powell refused to grant her a waiver to address financial holdings that ran afoul of the central bank’s ethics rules, according to a Fed official.

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Kugler also faced a probe by the Fed’s internal watchdog related to her recent financial disclosures before stepping down in August, according to a document released Saturday.

Fed ethics officials declined to certify Kugler’s latest disclosures, which were posted on the website of the Office of Government Ethics, and referred the matter to the board’s inspector general, the document showed. The disclosures revealed details related to financial activity that appeared to violate the Fed’s internal ethics rules.

Kugler announced on Aug. 1 that she would resign effective Aug. 8, without citing a reason and after she missed the central bank’s July 29-30 policy meeting. At the time, the Fed said her absence from the meeting was due to a “personal matter.”

Ahead of that meeting, Kugler requested a waiver to conduct financial transactions to address what the Fed official described as impermissible financial holdings. She discussed that request with Powell, who denied it, according to the official.

Kugler declined to comment.

In the financial disclosure released Saturday, Fed ethics official Sean Croston said, “Consistent with our standard practices and policies, matters related to this disclosure were referred earlier this year by the Board’s Ethics Office to the independent Office of Inspector General for the Board of Governors of the Federal Reserve System.”

The financial disclosure, which was submitted roughly a month after Kugler’s departure, covered calendar years 2024 and 2025 through her resignation. Top Fed officials are required to submit disclosures annually and after leaving the central bank, and to report periodic financial transactions.

In periodic financial disclosures during 2024, Kugler acknowledged that she had run afoul of Fed investment and trading rules when her spouse completed four purchases of shares of Apple Inc. and Cava Group Inc.

Those trades violated the central bank’s rules that limit how senior Fed officials, their spouses and minor children invest and trade, including a general prohibition on the purchase of individual stocks.