Former Federal Reserve Governor Adriana Kugler violated the central bank’s ethics rules by trading stocks during prohibited periods, leading to her abrupt resignation in August 2025, according to a new report from the U.S. Office of Government Ethics released on November 15, 2025. The disclosure highlights ongoing concerns about financial conduct among top officials at the influential institution.
Kugler, who was appointed by President Joe Biden in 2023, engaged in transactions involving individual stocks such as Apple, Southwest Airlines, and Caterpillar during ‘blackout periods’ ahead of Federal Open Market Committee meetings. These windows are designed to prevent officials from potentially profiting off insider knowledge of monetary policy decisions. Her actions breached rules established in 2021 that ban Fed policymakers from buying individual stocks and restrict active trading to maintain public trust.
The violations came to light after Kugler requested a waiver from Fed Chair Jerome Powell to address ‘impermissible holdings’ in her portfolio shortly before a July 2025 FOMC meeting. Powell denied the request, and Kugler did not attend that meeting, citing personal reasons. She announced her resignation on August 1, 2025, effective a week later, without providing a specific explanation at the time, leaving her term unfinished nearly five months early.
Some of the improper trades were attributed to Kugler’s spouse, Ignacio Donoso, who conducted transactions without her knowledge, according to her financial disclosure reports. Kugler affirmed that her husband did not intend to violate any rules and noted that she promptly notified ethics officials upon learning of the issues. This isn’t the first instance; in October 2024, she received ethics training after similar concerns were raised and referred to the Fed’s inspector general.
The Fed’s internal watchdog has opened an investigation into the matter, reflecting heightened scrutiny of officials’ financial activities. This case echoes previous controversies, including trades by regional Fed presidents during the COVID-19 pandemic, which prompted the 2021 rule overhaul to enhance transparency and prevent conflicts of interest. Those earlier incidents led to resignations and public outcry over the appearance of impropriety.
Kugler’s departure allowed President Donald Trump to appoint Stephen Miran, one of his top economic advisers, to fill the vacant seat on the Fed Board of Governors. Miran has since participated in meetings and diverged from consensus views, potentially influencing the central bank’s direction. Kugler has returned to her role as a professor at Georgetown University’s McCourt School of Public Policy, but the ethics fallout continues to draw attention.
In response to the report, Senator Elizabeth Warren called for stronger ethics legislation to ensure Fed decisions are driven by public interest rather than personal gain. She emphasized the need for bipartisan efforts to increase accountability at the central bank, underscoring how such violations can erode confidence in economic stewardship. The incident may fuel broader debates over financial regulations and governance in key institutions.
The revelations underscore persistent challenges in enforcing ethics standards at the Fed, even after reforms. As the inspector general’s probe unfolds, the case could lead to further policy adjustments or disciplinary actions, shaping how the central bank manages internal conduct amid its critical role in the economy. The outcome may influence future appointments and the Fed’s ability to maintain its independence and credibility.
