Fed's Dudley Failed to Disclose Sibling Worked at Wells Fargo

  • Outside law firm found no evidence of preferential treatment
  • Ten-year mistake came to light after Hogg quit Bank of England

William Dudley

Photographer: Scott Eells/Bloomberg

Federal Reserve Bank of New York President William Dudley was investigated and cleared by an outside law firm for failing to disclose his half-sister’s position as an executive at Wells Fargo & Co., according to an annual disclosure filing.

The omission was deemed to be unintentional, according to the documents. Dudley notified compliance officials and board members at the New York Fed when he realized his error in April, who in turn brought in the law firm to conduct an independent investigation, according to a note with the filing, which was posted on the district bank’s website.

Attorneys at Jenner & Block LLP in New York reviewed thousands of documents including personal emails and text messages and interviewed more than 20 people inside and outside the New York Fed as part of its investigation, according to the firm’s report, which was also attached to the filing.

The attorneys concluded that "Mr. Dudley’s error was inadvertent," and that while it violated the New York Fed’s own code of conduct, it did not violate federal statutes.

"We uncovered no evidence that Mr. Dudley took actions in matters specific to Wells Fargo or that he directed Bank personnel with respect to matters specific to Wells Fargo," the report’s authors wrote.

In March, Charlotte Hogg resigned from her post as deputy governor of the Bank of England after it came to light that she had failed to disclose her brother’s employment at a bank regulated by the British central bank.

Dudley, who joined the New York Fed in 2007, realized his mistake in April when Hogg’s story came up during a meeting with Fed staff to discuss a presentation he would be giving on ethics, according to the Jenner & Block report.

The Fed has separately been under pressure from Senator Elizabeth Warren, a Massachusetts Democrat, to remove Wells Fargo directors over a scandal caused by employees of the San Francisco lender creating unauthorized bank accounts.

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