Federal Reserve Bank of Richmond Examiner Admits to Insider Trading, Faces 20 Years in Prison

A senior manager and bank examiner at the Federal Reserve Bank of Richmond, Robert Thompson, has admitted to insider trading after leveraging confidential information about seven banks to execute lucrative trades.

Thompson pled guilty in the U.S. District Court for the Eastern District of Virginia to charges of insider trading and making false statements, the Department of Justice (DOJ) revealed in a press release on Tuesday. He now faces a potential prison sentence of up to 20 years.

Misuse of Confidential Supervisory Information

As part of his role at the Federal Reserve Bank, Thompson had access to confidential supervisory information (CSI) concerning banks under Federal Reserve oversight. The DOJ found that from 2020 to 2024, Thompson used this sensitive information to conduct 69 trades, earning nearly $772,000 in personal profits.

Federal Reserve Bank employees, including examiners, are required to disclose their financial interests annually through Form D, a disclosure form that tracks any assets or equity stakes in member banks or bank holding companies within the Federal Reserve System. Each year, Thompson falsely claimed on his Form D submissions that he held no assets or equities in publicly traded financial institutions.

Statements from the Federal Reserve

Following the revelations, the Federal Reserve Bank of Richmond addressed the violations, with a spokesperson stating, “This was a clear violation of our well-established and well-communicated policies on ethics and conflicts of interest. We fully cooperated with the authorities who investigated this matter.”

Similarly, a Federal Reserve Board spokesperson reaffirmed the institution’s strict policies against misconduct. “There is no place at the Federal Reserve for the misuse of confidential information. We have robust safeguards in place to ensure that those who have access to supervisory information understand their responsibilities and obligations, including the outright prohibition on trading in bank stocks. We require regular training, as well as affirmations by our staff that each person understands and is committed to the highest standards of professional behavior.”

Past Incidents of Misuse of CSI

Thompson’s case is not the first instance of confidential supervisory information being misused. In 2016, Jeffrey Cho, a former analyst at the Federal Reserve Bank of Chicago, stole sensitive financial data before resigning and used it to enhance his job prospects during interviews. The DOJ reported that Cho was sentenced to six months of home confinement.

Additionally, in 2015, Jason Gross, a former Federal Reserve Bank of New York employee, pled guilty to theft of government property after providing CSI to a former co-worker working at a New York investment bank. Gross received a one-year prison sentence.

Ethical and Legal Implications

Thompson’s guilty plea underscores the risks of ethical violations within institutions entrusted with confidential financial data. While the Federal Reserve continues to stress its commitment to safeguarding sensitive information, this case highlights the importance of rigorous oversight and enforcement of ethical standards to protect public trust in the financial system. 

By fLEXI tEAM