The Federal Reserve has taken action against its top officials following a series of scandals involving possible insider trading by banning senior staff and policymakers from owning individual stocks and bonds and restricting trading.

The central bank pledged to also increase the frequency of reporting and public disclosures. 

In September, two of the 12 regional Federal Reserve Bank presidents resigned following disclosures about their stock activity in 2020 that triggered concerns about insider trading. Eric Rosengren, president of the Boston Federal Reserve, retired early after 14 years in the post, citing health problems. Just hours after Rosengren’s announcement, Robert Kaplan, president of the Dallas Federal Reserve Bank, said his last day would be Oct. 8, Reuters reported.

Critics say that Fed policies helped elevate stock prices and benefited richer Americans, including Rosengren and Kaplan. They bought and sold stocks at a time when the central bank’s policies were designed to improve market functioning, particularly during the covid-19 crisis, CNBC reported.

Under the new rules, Fed officials can no longer have holdings in shares of particular companies, nor can they invest in individual bonds, hold agency securities or derivative contracts, CNBC reported.

“These tough new rules raise the bar high in order to assure the public we serve that all of our senior officials maintain a single-minded focus on the public mission of the Federal Reserve,” Fed Chairman Jerome Powell said in a statement.

Powell himself was caught up in a scandal for selling millions of dollars worth of stocks while the stock market was crashing during the pandemic. 

Disclosure forms show that Powell sold up to $5 million in stock from his personal account on Oct. 1, 2020, shortly before the Dow Jones Industrial Average dropped significantly.

Fed policymakers and senior staff from now on will “generally” be required to provide 45 days advance notice for purchases and sales of securities and get prior approval for purchases and sales of securities, according to the Fed. They will also be required to hold investments for at least one year, CNN reported.

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The announcement came just after Sen. Elizabeth Warren called for the Fed to reveal a March 2020 ethics memo with more information on the Fed’s ethics scandal.

Warren tweeted recently that it should be illegal for Fed officials to trade individual stocks and that the officials “must avoid actual and perceived financial conflicts, period.”

“There can be no reform without accountability,” she tweeted. “That means disclosure of all trades to this point by Fed officials. All relevant Fed ethics guidance should be released publicly. And independent IG and SEC investigations must be completed promptly and without Fed interference.”

Of course Fed officials shouldn't trade individual stocks—it should be illegal. But Fed officials must avoid actual and perceived financial conflicts, period. We need full transparency on the behavior that's led us here & assurances these new policies will fix what's broken.

— Elizabeth Warren (@SenWarren) October 21, 2021