Fed officials face fines for ethics breaches under proposed Senate bill -WSJ

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FILE PHOTO: An eagle tops the U.S. Federal Reserve building's facade in Washington

– U.S. Federal Reserve officials who break proposed laws limiting their trading activities would face fines of at least 10% of the value of the banned investment that was either bought or sold, the Wall Street Journal reported on Wednesday.

The penalties are included in a Senate bill unveiled by Democratic Senator Sherrod Brown, who previously said he planned to introduce legislation to tighten ethics standards at the central bank.

Senators said the bill was a companion to legislation that would impose similar restrictions on members of Congress, the Journal reported, citing a news release that was not yet released to the public.

Much of what the senators are proposing for the Fed hews closely to changes the central bank is already making.

The Fed last week banned individual stock purchases by its top officials and unveiled a broad set of other restrictions on their investing activities, taking action roughly six weeks after reports of active trading by some U.S. central bank policymakers triggered an ethics uproar and the departure of two of them.

The Fed’s new rules will limit the types of financial securities top officials can own, including a ban on purchasing individual stocks or holding individual bonds and agency-backed securities. It also requires a 45-day advance notice and approval of any transaction and stipulates investments be held for at least a year. It did not specify any penalties for not adhering to the new rules.

(Reporting by Lindsay Dunsmuir; Editing by Bill Berkrot)