The Federal Reserve admitted on Monday that it was under investigation by the Justice Department regarding the disclosure of confidential information about a crucial meeting of the Fed monetary policy committee back in 2012.
The investigation came to light in a letter to congressional Republicans who are demanding more information about the leak as well the Fed’s internal inquiry into the incident.
A spokesperson for the Justice Department would not comment about the investigation to the media.
At this year's SALT New York conference, Jean Hynes, the CEO of Wellington Management, took to the stage to discuss the role of active management in today's investment environment. Hynes succeeded Brendan Swords as the CEO of Wellington at the end of June after nearly 30 years at the firm. Wellington is one of the Read More
Details of the ongoing investigation at the Federal Reserve
Of note, the letter stated the Federal Reserve will give House investigators a confidential list of all Fed staff members who were involved in the internal inquiry, but it also requested that congressional Republicans hold off on their investigation until the results of all other inquiries are finalized. The Fed’s inspector general said nearly two months ago that it planned to reopen its investigation of the 2012 leak.
Yellen pointed out her name was among those on the list of Fed officials who had contact with Medley Global Advisors, a firm that sells analysis and reporting to investors. Medley is at the center of the investigation as they published a report in October 2012 with detailed information about the prior meeting of the Federal Open Market Committee in September.
Yellen highlighted in the letter that that her meeting with Medley occurred in June.
“Nothing Medley Global Advisors reported in October about the events of the September 2012 F.O.M.C. meeting could have been conveyed in June, and let me assure you that, in any case, I did not convey any confidential information,” she explained in the letter posted on the Fed’s late on Monday.
Keep in mind that information about the Fed’s plans can be very valuable to investors, especially insights that are not generally available to the public. That is why the Fed has tough rules about the disclosure of almost any information outside its public statements. Analysts note that other Fed leaks in the past have ended up as criminal investigations.
See full letter below.