Benzinga | Sep 16, 2021 01:09PM EDT

Sen. Elizabeth Warren Asks Federal Reserve To Ban Its Leaders From Trading Stocks

Sen. Elizabeth Warren (D-MA) has called on the 12 regional presidents of the Federal Reserve System to enact new rules to prevent their leaders from individual stock trading.

What Happened: Warren, who is the chairwoman of the Senate Banking, Housing and Urban Affairs Subcommittee on Economic Policy, made her request following news reports that Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren actively traded stocks and other investments during 2020.

The Wall Street Journal reported Kaplan made multiple stock trades of more than $1 million each involving shares of Apple Inc (NASDAQ:AAPL), Alibaba Group Holding Ltd. -ADR (NYSE:BABA), Amazon.com, Inc. (NASDAQ:AMZN), Chevron Corporation (NYSE:CVX) and General Electric Company (NYSE:GE), while Rosengren focused his trades on real estate-related securities.

Warren pointed out that although Kaplan and Rosengren pledged to sell their individual stock holdings and no longer trade individual stocks, their actions created conflicts of interest and potential self-dealing.

"This controversy over asset trading by high-level Fed personnel highlights why it is necessary to ban ownership and trading of individual stocks by senior officials who are supposed to serve the public interest," Warren stated. "Regional Fed leaders must ban the ownership and trading of individual stocks by senior officials, and impose strong and enforceable ethics and financial conflicts of interest rules for themselves and their staff to restore public trust."

Related Link: Sen. Elizabeth Warren Asks Federal Reserve To Break Up Wells Fargo

What Else Happened: Warren also raised attention to her proposed Anti-Corruption and Public Integrity Act, which she said was designed to strengthen conflict of interest and recusal requirements of government officials by banning individual stock ownership by members of Congress, senior congressional staff, federal judges, members of the presidential cabinet, White House staff and other senior agency officials while they are in office.

Warren's legislation also included provisions to prevent federal government officials from holding or trading stock in companies that could influence their agency, department or actions. It also requires senior government officials and White House staff to divest from privately owned assets that could present conflicts, including large companies and commercial real estate.

Warren introduced the Anti-Corruption and Public Integrity Act in 2018 without co-sponsors and was never acted upon by the Senate. She reintroduced the legislation in 2020, again without co-sponsors, and the bill was referred to the Senate Finance Committee but has yet to be brought up for consideration.

Photo: Gage Skidmore / Flickr Creative Commons.