In a recent revelation that has sparked concern, a former Federal Reserve governor, who stepped down in August, has been found to have engaged in stock trades that contravened the Federal Reserve’s ethical guidelines. These details emerged from her 2024 financial disclosure documents.

The U.S. Office of Government Ethics published a report on Saturday, shedding light on the transactions made by Adriana Kugler. The report came after the Federal Reserve referred her financial activities to its inspector general earlier this year for further scrutiny.

Kugler, who unexpectedly resigned from her position on the Fed board on August 8, reported over a dozen individual stock trades. Notably, some of these trades occurred during blackout periods, which coincide with the Federal Reserve’s critical meetings on monetary policy, including setting interest rates.

The stocks involved in Kugler’s transactions include notable companies such as Southwest Airlines, Apple, Caterpillar, and Fortinet. Among these, her most significant transaction was an Apple stock purchase in April 2024, valued between $100,000 and $250,000.

The Federal Reserve’s actions on interest rates and banking regulations are known to cause substantial volatility in the financial markets, affecting the prices of stocks, bonds, and other securities. Consequently, Fed officials are prohibited from engaging in individual stock, bond, or cryptocurrency investments. Instead, they are encouraged to invest through diversified vehicles like mutual funds.

Strict protocols require Fed officials to notify the central bank 45 days prior to any trade, obtain approval, and publicly disclose any trades made within the previous 30-day period. This framework is designed to maintain transparency and prevent any conflicts of interest that could arise from personal financial activities.

It’s also forbidden for Fed officials to engage in financial transactions during the blackout period around the eight times during the year when the Fed’s policymaking committee meets. That blackout period is roughly 10 days before a Fed meeting and one day after the meeting ends.

Among the transactions disclosed by Kugler was a sale of stock in Palo Alto Networks ranging between about $50,000-$100,000, and a stock purchase in Cava Group for about $1,000-$15,000 — both in March 2024, within a week of that month’s meeting of Fed policymakers.

Kugler also disclosed another Cava Group stock purchase in April of between $1,000-$15,000 and the sale of between $15,000-$50,000 in Southwest Airlines stock during the blackout period before the Fed meeting that started April 30, 2024.

The report notes that “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.”

In 2022, the Fed formally adopted sweeping new rules aimed at limiting the ability of its top officials to invest in financial markets, a change intended to prevent conflicts of interest involving investments affected by Fed policies. The move followed an outcry over questionable trades that were made by several top Fed policymakers.

That year, Raphael Bostic, president of the Federal Reserve Bank of Atlanta, acknowledged that many of his financial investments and trades in previous years had violated Fed ethics rules and revised all his financial statements dating back to 2017. At the time, he said the trades were made by investment managers that he did not directly oversee and that he was unaware of the transactions.

Kugler, who did not provide a reason for stepping down in her resignation letter, was appointed to the Fed’s seven-member board of governors by former President Joe Biden in September 2023. She was the first Hispanic Fed governor. Prior to joining the Fed, she was a professor at Georgetown University and was the U.S. representative to the World Bank. Kugler returned to the Georgetown faculty in the fall.

In September, Stephen Miran, one of President Donald Trump’s top economic advisers, was confirmed by the Senate to take the seat on the Federal Reserve’s governing board vacated by Kugler.