Another Federal Reserve insider has stumbled into an ethics scandal that smells worse than a Wall Street backroom deal.
The Daily Mail reported that Adriana Kugler, once a high-ranking member of the Federal Reserve Board, was caught up in a mess of stock trades that broke strict Fed rules, leading to her abrupt resignation.
This saga boils down to Kugler’s husband making prohibited stock trades ahead of critical interest rate meetings, resulting in an ethics violation finding by the U.S. Office of Government Ethics and her exit from the Fed in August 2024.
Let’s rewind to 2023, when whispers of questionable trading activity surrounding Kugler first surfaced, prompting an investigation. The 56-year-old, nominated by President Biden and confirmed to the Fed Board in September of that year, seemed poised for a steady tenure. But beneath the surface, trouble was brewing.
A report released on Saturday by the Office of Government Ethics dropped the bombshell: Kugler’s spouse, Ignacio Donoso, a Maryland-based business immigration lawyer, executed trades during the Fed’s “blackout period.”
This window, roughly ten days before and one day after Federal Open Market Committee (FOMC) meetings, bans officials and their families from trading to avoid any whiff of insider advantage. Apparently, that memo didn’t reach Donoso’s desk.
The specifics are jaw-dropping—shares of Apple, Southwest Airlines, and Cava were bought and sold at the worst possible times. Think purchasing Southwest stock in March, only to dump it the day before an FOMC meeting on April 30, or snapping up between $100,000 and $250,000 in Apple shares in April.
Cava stock was a particular favorite, with buys and sells happening multiple times between March and May, including a purchase just a week before a policy meeting.
If timing is everything, this was a masterclass in getting it wrong. And while rules tightened by Chair Jerome Powell in 2021 and 2022—post-scandals involving former officials—were meant to prevent this, loopholes or ignorance seem to persist.
Kugler didn’t shy away from the spotlight when the heat turned up, disclosing in September 2024 that these trades were made by her husband without her knowledge.
She insisted she acted swiftly, notifying ethics officials the moment she learned of the transactions. It’s a defense that sounds reasonable—until you remember that accountability at this level should include spousal compliance with Fed policies.
“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,” Kugler stated in a previous ethics report.
Nice try, but ignorance isn’t exactly a get-out-of-jail-free card when you’re shaping national monetary policy. Shouldn’t a Fed governor ensure their household is on the same page as the rulebook?
The ethics report backs her claim, noting, “Consistent with her September 15, 2024, disclosure, certain trading activity was carried out by Dr. Kugler’s spouse, without Dr. Kugler’s knowledge and she affirms that her spouse did not intend to violate any rules or policies.” Fair enough, but intent or not, the damage is done. This isn’t just a personal oops—it erodes trust in an institution already under scrutiny.
Criticism mounted by September 2024, especially over the Apple and Cava dealings, and Kugler’s request for a waiver on her ethics disclosures in May was flat-out denied.
She didn’t even participate in the July FOMC meeting, a sign that the writing was on the wall. By August 1, 2024, she tendered her resignation, effective a week later, to President Trump.
Trump, never one to miss an opportunity, expressed delight at the open slot on the Fed Board, quickly nominating Stephen Miran as her replacement.
It’s hard not to see this as a chance to steer the Fed away from what many conservatives view as overly cautious or progressive-leaning policies. A fresh face might just shake things up—in a good way.
Kugler, for her part, landed softly as a professor at Georgetown University’s McCourt School of Public Policy and Economics. One door closes, another opens, but the stench of this scandal lingers. It’s a cushy landing for someone whose tenure ended under such a cloud.
Let’s not pretend this is a one-off—past scandals with officials like Eric Rosengren and Robert Kaplan forced the Fed to clamp down on trading rules in the first place. Yet here we are again, with a governor’s spouse playing fast and loose during blackout periods. If the Fed can’t enforce compliance within its own ranks, how can it expect to maintain public confidence?
