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According to an article in the Wall Street Journal, Questions About Leak at Federal Reserve Escalate to Insider-Trading Probe (firm at center of probe says it is a media organization with special legal protections).
WASHINGTON—A high-profile investigation into a leak of sensitive information from the Federal Reserve in 2012 has escalated to an insider-trading probe led by a key market surveillance agency and federal prosecutors in Manhattan, according to people familiar with the matter.
But the firm at the center of the probe, Medley Global Advisors, has thrown up a roadblock by claiming a novel defense: It says it is a media organization entitled to special protections under the law, the people said.
Federal prosecutors in the Southern District of New York are focusing on the information leak while the Commodity Futures Trading Commission is looking into whether anyone violated insider-trading rules in 2012 when Medley disclosed to its clients details about the Fed’s plans for further economic stimulus, according to people familiar with the matter.
Buried in the story:
The Oct. 3 Medley note, which came the day before the Fed released the meeting minutes, included confidential details that indicated the information came from inside the Fed.
For example, Medley stated that Fed officials debated providing an assurance that they wouldn’t consider raising interest rates until unemployment fell below 6.5% or the medium-term outlook for inflation rose above 2.5%. The language was adopted later that year.
Well, it’s no secret that The Fed can’t generate inflation.
And unemployment rates are fairly meaningless since wage growth is so low.
Say, I hope Yellen didn’t tell Medley about the 6th degree polynomial regression of the Case-Shiller home price index!!!
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