Courtesy of Pam Martens
Robert Kaplan, Former President of the Dallas Fed
Former Dallas Fed President Robert Kaplan made “over $1 million” trades in and out of S&P 500 futures throughout his tenure at the Dallas Fed, which began in September 2015 and ended with his resignation on September 27 of this year over his scandalous trading.
Trading in S&P 500 futures is a market-timing device used by hedge funds and day traders. No individual with market-moving information at the Federal Reserve should ever use such a device.
The U.S. stock market is open from 9:30 a.m. to 4:00 p.m. (ET) Monday through Friday. But S&P 500 futures trade around the clock during weekdays. The E-mini S&P 500 futures contract is the most popular and liquid S&P 500 futures contract. It can be leveraged by as much as 95 percent. The E-mini trades continuously from 6 p.m. Sunday night through 5 p.m. on Friday evening (ET), allowing someone who might wish to trade on inside information a much larger window of opportunity to do so than stock trading.
Kaplan was a sophisticated trader who previously worked at Goldman Sachs for 22 years, rising to the rank of Vice Chairman. His financial disclosure forms suggest that Kaplan maintained a trading relationship with Goldman Sachs, since he lists proprietary products created by “GS,” short for Goldman Sachs. (See Kaplan’s financial disclosure forms from 2015 through 2020 here.)
Wall Street On Parade previously reached out via email to a total of five Goldman Sachs media relations staff inquiring as to whether Kaplan was conducting his S&P 500 trades and/or his individual stock trades of “over $1 million” at their firm. The company declined to answer our questions. The Dallas Fed refused to tell us if Kaplan was using S&P 500 futures to short the market — a bet that the market would go down.
