Ex-Fed Official Pleads Guilty to Fraud
A former New York Federal Reserve Bank board member pleaded guilty Wednesday to illegally passing on confidential interest rate data in the first insider trading case involving government securities.
In a plea agreement, Robert A. Rough, 50, pleaded guilty to a single bank fraud charge and the government in exchange dropped two insider trading charges and four related counts.
Rough admitted leaking confidential data while he served as a New York Fed board member from 1982 to 1984 to a securities firm that made about $50 million from the information.
As part of the plea deal, prosecutors also agreed to recommend a prison term of under one year for the former banker. Rough faces a maximum five years in jail and $10,000 fine. Sentencing is set for Aug. 18.
Rough’s attorney, Michael Himmel, said his client had sent letters of apology to the New York Fed and Federal Reserve Bank in Washington.
“To me, it’s certainly a step in the right direction, an example of contrition,” Himmel said.
U.S. District Judge Dickinson R. Debevoise called the apologies a “good step.”
Rough admitted giving a Livingston brokerage confidential data about the discount rate set by the Fed in Washington. The New York Fed and 11 sister regional banks make regular recommendations to the Fed on the rate, which has a powerful bearing on government securities.
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