Richmond Fed President Jeff Lacker resigns over leaking sensitive Fed information…(brain fade moment?)

It was shocking to read this early morning. Richmond Fed President Lacker resigned over leaking sensitive information to a private player:

In his letter of resignation, Lacker admitted to speaking to an analyst at Medley Global Advisors regarding the September 2012 Fed meeting. Medley publishes analysis for hedge funds and asset managers and is owned by the Financial Times. Lacker said his actions violated Fed communications policies that prohibit “providing any profit-making person or organization with a prestige advantage over its competitors.”

Lacker said he was asked by an analyst about an “important nonpublic detail” regarding the Federal Open Market Committee’s policy options.

“Due to the highly confidential and sensitive nature of this information, I should have declined to comment and perhaps have ended the phone call,” Lacker said. “Instead, I did not refuse or express my inability to comment and the interview continued.”

In addition, Lacker said he was obligated to disclose that the analyst had confidential information, which he did not do.

Medley ultimately told clients in October 2012 that the Fed would initiate another leg of its monthly bond-buying program in December. The author of the note was Regina Schleiger, who added in the note that Fed members had been up after midnight preparing for the meeting, according to the New York Times.

Former Atlanta Fed head says it was perhaps a brain fade moment:

Richmond Federal Reserve President Jeffrey Lacker’s leak of sensitive information in 2012 could have come about as a consequence of a “mind lapse”, according to one of his former colleagues.

Former Atlanta Federal Reserve President Dennis Lockhart told CNBC Wednesday that the incident was “regrettable”. Lacker tendered his resignation on Tuesday after admitting he had discussed sensitive information about Fed policy options with a Wall Street analyst in 2012.

“I don’t know the details but it could very well be inadvertent. It could be something that is sort of a mind lapse at a moment that you are not thinking,” Lockhart told CNBC when asked to comment on Lacker’s resignation.

 “It was a few days before the minutes were to come out and so the leak as I recall… the leak involved disclosing information in advance of the minutes which of course is a no no. Jeff for me has been a very valued colleague for many years so I just think this is a regrettable set of circumstances,” he added.
Brain fade of course became very famous during recent Indo-Aus series..

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