Former Fed governor Adriana Kugler accused of improper trading around FOMC meetings

The trouble around Adriana began when a new ethics report dropped on Saturday from the U.S. Office of Government Ethics, showing that she broke the Fed’s ban on trading individual stocks and making financial moves close to rate‑setting meetings.

Three months ago, Adriana had walked away from the Federal Reserve Board without saying a single thing about why she was leaving.

She joined the Fed in September 2023 after being appointed by then‑President Joe Biden, and her exit set off speculation until the new disclosures spelled out the violations that pushed her out.

Tracking the trades and handling the fallout

According to Fed officials who spoke with CNBC, the turning point came when Adriana asked Chair Jerome Powell for a waiver after her disclosure form showed she held assets she was not allowed to own. Powell denied that request.

The same officials said concerns about trades linked to her or her husband went back to at least September 2024, when she started working with ethics officers to fix the problems.

A financial disclosure filed on September 11 listed transactions by her or her husband, and an Ethics Office official refused to certify the filing.

The disclosure included a note saying the matter had been referred earlier in the year to the Office of Inspector General for the Federal Reserve System.

Another note said certain trades were done by her husband without her knowledge, and Adriana affirmed that he did not intend to break any rule or policy.

Her husband, Ignacio Donoso, an immigration lawyer, became part of the story because the violations involved two issues: buying stock in single companies instead of sticking with mutual funds, and buying securities inside blackout windows that surround FOMC meetings.

Those meetings set interest rates, and markets jump or fall on expectations around them.

The report listed trades tied to companies like Apple, Southwest Airlines, Caterpillar, and Cava Group.

During her time on the Fed Board, Adriana attended FOMC meetings, but she skipped the July meeting after the Fed said she had a personal matter. Fed officials told CNBC she had asked for a waiver right before that meeting to handle the holdings in her portfolio.

She had already received one routine extension two months earlier. Powell said no to the second request, and she did not attend that meeting. Days later, on August 1, she said she would resign effective August 8.

Filing new disclosures and dealing with new rules

In a disclosure filed in October 2024, Adriana again pointed to her husband for four trades that violated Fed rules: three Apple stock purchases in July and a Cava purchase in September.

She said, “These four purchases were carried out by my spouse, without my knowledge, and I affirm that my spouse did not intend to violate any rules.” She added, “Upon learning about the purchases, I immediately notified ethics officials, and at their direction, I initiated divestiture of these assets as soon as possible under FOMC ethics policies.”

CNBC also reported that Adriana received more than $41,000 in pro bono legal help from Arnold & Porter. CNBC reached out to both her and Donoso for comment.

After leaving the Fed, Adriana returned to Georgetown University, where she teaches public policy and economics. Her case comes after the Fed adopted new rules in 2022 banning trades in individual stocks, bonds, and crypto.

Those rules were created after earlier controversies involving Eric Rosengren and Robert Kaplan, who traded during the early pandemic response. Powell and others also faced heat over past trades.

Her exit opened the door for President Donald Trump to appoint Stephen Miran to fill the remainder of her term. In 2024, the Fed inspector general found that Raphael Bostic, who retires in February, violated trading rules during his tenure too.

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