Ex-Fed governor Adriana Kugler resigned after violating trading rules, documents show

WASHINGTON - Former Federal Reserve governor

Adriana Kugler, whose abrupt resignation allowed President Donald Trump to install an ally at the US central bank

, violated Fed ethics rules and was subject to an internal probe when she stepped down in August, documents released on Nov 15 showed.

In her final weeks at the Fed, Dr Kugler sought to address a problem with her financial holdings, but chairman Jerome Powell denied her request for a necessary waiver ahead of the central bank’s July 29-30 policy meeting, according to a Fed official.

She skipped the meeting and announced her resignation days later.

The Office of Government Ethics on Nov 15 released Dr Kugler’s latest financial disclosures, which included previously undisclosed trading in multiple individual stocks in 2024 – some of which occurred during the Fed’s blackout period – in violation of the agency’s ethics rules. 

Fed ethics officials referred the matter to the agency’s inspector-general earlier in 2025, the form showed.

They also declined to certify the disclosures, which Dr Kugler filed about a month after her resignation. A spokesperson for the inspector general said on Nov 15 that an investigation is ongoing.

Dr Kugler’s resignation gave Mr Trump an earlier-than-expected opportunity to fill a slot on the Fed’s board in the midst of his intense pressure campaign urging policymakers to drastically lower interest rates.

The opening ultimately went to Trump adviser Stephen Miran

, who took an unpaid leave of absence from his post as chair of the White House Council of Economic Advisers and has called repeatedly for rapid rate cuts.

Dr Kugler, who was appointed to the Fed in September 2023 by President Joe Biden, declined to comment.

The former Fed governor announced on Aug 1 that she would step down, effective from Aug 8 – nearly six months before her term was set to end – without citing a reason, and after she missed the central bank’s July meeting.

At the time, the Fed said her absence was due to a “personal matter”.

Ahead of that meeting, she sought permission to conduct transactions to address what the Fed official described as impermissible financial holdings. It was not immediately clear which holdings were involved in that request.

According to the official, Dr Kugler asked for a waiver to rules requiring top Fed officials to obtain clearance before conducting certain financial transactions and prohibiting them from trading during so-called blackout periods that straddle their policy meetings.

Mr Powell denied the request.

Prohibited trades

It was not the first time Dr Kugler had run afoul of the Fed’s ethics rules.

She acknowledged in disclosures in 2024 that she had violated prohibitions on trading when her husband executed several stock trades. 

Dr Kugler said at the time that her spouse had made the purchases without her knowledge.

The shares were later divested, and she was deemed in compliance with applicable laws and regulations, according to the disclosures.

The newly released documents showed previously undisclosed trading in 2024 in individual stocks – which is prohibited for Fed officials and their immediate family members – including Materialise NV, Southwest Airlines, Cava Group, Apple Inc and Caterpillar.

Some of the trades were also executed during blackout periods, when transactions are prohibited.

That included the purchase of Cava shares on March 13, 2024, days ahead of a March 19-20 meeting, and the sale of Southwest shares on April 29, 2024, on the eve of the Fed’s April 30-May 1 gathering.

The disclosure also lists several fund transactions that fell within blackout periods. 

A footnote connected to the Jan 2, 2024, sale of Materialise NV shares read: “Consistent with her Sept 15, 2024, disclosure, certain trading activity was carried out by Dr Kugler’s spouse, without Dr Kugler’s knowledge, and she affirms that her spouse did not intend to violate any rules or policies.”

Financial disclosure

The disclosure covered calendar years 2024 and 2025 through Dr Kugler’s resignation.

Top Fed officials are required to submit disclosures annually and after leaving the central bank, and to report periodic financial transactions. 

A spokesperson for the Fed’s Office of Inspector General on Nov 15 confirmed that the office received a referral from the board’s ethics section related to Dr Kugler’s filing.

“We have opened an investigation and, consistent with our practice, we are unable to comment further until our investigation is closed,” the person said.

Mr Powell in 2022 introduced tougher restrictions on investing and trading for policymakers and senior staff at the central bank.

That followed revelations of unusual trading activity in 2020 by several senior officials.

Boston Fed president Eric Rosengren and Dallas Fed chief Robert Kaplan each announced their early retirement after the revelations, with Mr Rosengren citing ill health.

The Fed’s internal watchdog ultimately cleared the pair of legal wrongdoing, but chastised them for undermining public confidence in the central bank.

The new rules, which the Fed said at the time were aimed at supporting the public’s confidence in the impartiality and integrity of policymakers, boosted financial disclosure requirements, among other measures.

Senator Elizabeth Warren, a Democrat from Massachusetts who has long called for stricter ethics rules at the central bank, released a statement on Nov 15 calling for bipartisan legislation “to make the Fed more transparent and accountable”.

The latest scandal “makes clear that the Fed still doesn’t have the guard rails or culture of accountability the American people expect”, Senate Banking Committee chair Tim Scott said in a statement.

“The next Fed chair must restore integrity, strengthen transparency, and end the pattern of insiders playing by their own rules,” Mr Scott added. BLOOMBERG