Fed leak tipped traders to historic stimulus move, prompted secret inquiry

But no findings were ever made public.

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By Craig Torres
Bloomberg News
Monday, December 1, 2014

Alarms went off inside the Federal Reserve: the Fed’s innermost secrets had leaked to Wall Street.

Confidential deliberations of the Federal Open Market Committee made their way into a research note circulated among traders.

The report -- a fly-on-the-wall account of the FOMC’s September 2012 meeting, with hints of Fed action to come that December -- prompted a mole hunt that reached the highest levels of the central bank.

The story of the FOMC leak underscores the lengths to which outsiders will go to penetrate the inner workings of the Fed, and how valuable access can be. The Fed has never disclosed the investigation or its findings. ...

In their November memo, Alvarez and English asked officials to disclose any communications with Schleiger and Hilsenrath and to hand over e-mail and phone records. Under Fed rules, the general counsel and FOMC secretary investigate if the chain of confidentiality is broken and report their findings to the chairman.

The Fed has never disclosed the findings.

The Fed's general counsel can also ask the Fed inspector general to investigate breaches. No specific mention was made of an inspector general investigation into the 2012 FOMC leak in that office’s 2013 reports to Congress.

John Manibusan, a spokesman for the inspector general, declined to comment.

... For the remainder of the report:

http://www.bloomberg.com/news/2014-12-01/fed-leak-handed-traders-profita...