by Pam Martens and Russ Martens
Wall Street on Parade
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.