Rob Kaplan is retiring as president and CEO of The Federal Reserve Bank of Dallas after financial disclosures showed he was trading stocks last year while voting on critical monetary policy for the U.S. during the pandemic.
While the investments are permitted under the Fed’s rules, Kaplan, 64, said he didn’t want his financial disclosures to distract from the country’s economic recovery process.
“Unfortunately, the recent focus on my financial disclosure risks becoming a distraction to the Federal Reserve’s execution of that vital work,” Kaplan said in a statement. “For that reason, I have decided to retire as President and CEO of the Federal Reserve Bank of Dallas.
The announcement came hours after Boston Fed President Eric Rosengren said he was retiring early because he qualified for a kidney transplant. He originally planned to retire in June 2022 when he hit 65, the mandatory retirement age for bank presidents.
Both Fed officials, as well as nine others, had their 2020 financial stock-trading activities publicized in an article in The Wall Street Journal in September. After questions about the ethics of the trades, both Fed presidents announced they would sell all their individual stock holdings by Sept. 30.
At the time, Kaplan released a statement saying he would change his personal investment practices “to avoid even the appearance of any conflict of interest.” He also said there would be no further trading in those accounts while he was the head of the Dallas Fed.
Since then, the Fed has launched a review of its trading rules for officials.
Kaplan and Rosengren both maintain they adhered to all of the Fed’s ethical standards and policies.
When Kaplan joined the bank, he sold all of his personal holdings related to financial institutions that the Fed had regulatory oversight over, the Dallas Fed noted in the retirement announcement. “Rob also conducted his investment activities in accordance with the rules and policies of the Federal Reserve System,” the Dallas Fed said.
Kaplan’s financial transactions, showing millions of dollars in trades in 2020, stood out from the other Fed presidents’ financial profiles, which were more modest. Kaplan had 27 stock, fund or alternative asset holdings valued at over $1 million each, including Apple, Alibaba, Amazon, Facebook, Google and Tesla. He also had 22 buying or selling transactions valued at over $1 million each.
Rosengren’s financial disclosures showed stakes in four separate real estate investment trusts and disclosed multiple purchases and sales in those and other securities last year.
Federal Reserve Bank presidents are subject to mandatory retirement at 65 years of age unless they’re appointed after the age of 55, in which case they can serve up to 10 years before having to retire. Since Kaplan was appointed in 2015 at age 58, he could have served until 2025.
A former Goldman Sachs executive who considered himself a centrist on monetary policy, Kaplan’s retirement will be effective Oct. 8. He served for six years and was the 13th leader of the Dallas Fed.
Before joining the Fed, Kaplan spent 23 years at Goldman Sachs and taught at Harvard Business School. At Goldman Sachs, he became a partner in 1990 and went on to become vice chairman and then senior director of the firm.
At the 1,200-employee Dallas Fed, he heads a district that includes Texas, northern Louisiana and southern New Mexico.