8chan/8kun QRB Posts (1)
#96382 at 2021-09-28 18:42:55 (UTC+1)
QRB General #621: So What's Goin' On with DiFi? Edition
>>96108 pb Rob Kaplan to retire as Dallas Fed president after controversy over financial disclosures
Goldman Sachs Refuses to Say If It Was Placing Trades for Dallas Fed President Kaplan as Materially False Statement Released by Board on Kaplan's Relationship with Goldman Sachs
The biggest trading scandal in the Federal Reserve's 108-year history took down two Federal Reserve Bank Presidents yesterday. Boston Fed President Eric Rosengren, who traded in and out of REITs last year in amounts of $1,000 to $50,000, will leave this Thursday; Dallas Fed President Robert Kaplan, whose trading made Rosengren look like a Boy Scout, will step down from his post at the end of next week. Kaplan was making repeated trades of "over $1 million" in S&P 500 futures (an instrument used during and after stock exchange hours by hedge funds) as well as making "over $1 million" trades in a litany of individual stocks.
Just as a poker player can give away his hand with a tell, financial disclosure statements can also provide a tell as to the name of the Wall Street firm that is placing the trades.
Dallas Fed President Robert Kaplan has a "tell" on his financial disclosure forms that suggests he was placing at least some of his trades at the Wall Street firm where he worked for 22 years, Goldman Sachs, the global trading behemoth. Most trading accounts at the major firms have what is called a "sweep account." When a trader sells a stock, instead of the proceeds sitting in cash without earning interest, the proceeds are "swept" into a designated money market fund. The only money market fund that Kaplan indicates he owns is listed as the "GS Financial Square Money Market Fund" on his financial disclosure form. GS stands for...wait for it...Goldman Sachs. The Goldman Sachs Financial Square Money Market Fund was not listed on Kaplan's financial disclosure form for calendar year 2015, the year he joined the Dallas Fed. But it was listed on his financial disclosure forms for years 2016 through 2020.
We have now reached out via email, over multiple days, to a total of five of Goldman Sachs' media relations staff, including a Managing Director and Head of Media Relations, inquiring as follows: "Wall Street On Parade has significant reasons to believe that Dallas Fed President, Robert Kaplan, was conducting at least some of his trades that have been in the news recently through an account at Goldman Sachs. "(1) Can you tell me if Kaplan was trading his numerous 'over $1 million' S&P 500 futures trades through Goldman Sachs or (2) his 'over $1 million' individual stock trades at Goldman Sachs; or (3) if he was conducting both S&P 500 futures and individual stock trades at Goldman Sachs." We heard dead silence from all five media relations folks. In the second email we reminded Goldman Sachs of the following: "As you may know, Goldman Sachs remains under a Deferred Prosecution agreement for a criminal charge with the Department of Justice and an ongoing 3-year probation period. Given the serious issues we raise in an article today around the failed compliance obligations of the brokerage firm that conducted these trades for Kaplan, we would expect that Goldman Sachs would want to get it on the public record quickly if it did not conduct these trades for Kaplan." Again, all we heard was dead silence from Goldman Sachs.
Can we conclusively say that Kaplan was making his trades with the firm where he spent the bulk of his career, no we can't. But we can conclusively state that two members of the Dallas Fed Board of Directors, speaking on behalf of the entire Board, released a materially false statement yesterday regarding Kaplan's relationship with Goldman Sachs. The statement released yesterday by Greg Armstrong, Chair of the Board of Directors of the Dallas Fed, and Thomas Falk, Deputy Chair "on behalf of and with the unanimous endorsement of" the entire Board, included these two sentences: "Upon joining the Bank, Rob systematically sold all of his personal holdings related to financial institutions over which the Federal Reserve had regulatory oversight or were otherwise restricted. Rob also conducted his investment activities in accordance with the rules and policies of the Federal Reserve System." The first sentence is materially false. Kaplan held a position offered by Goldman Sachs, a "financial institution over which the Federal Reserve had regulatory oversight" at the time of his first financial disclosure at the Dallas Fed in 2015. He held multiple positions offered by Goldman Sachs after joining the Dallas Fed. The second sentence is spurious; Kaplan violated at least two of the prohibitions in the Dallas Fed Code of Conduct.
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