Report: Big Investors Buy Early Access to Federal Reserve Data

A former Federal Reserve economist had access to notes of the central bank's meetings before the general public did and shared the information with clients who paid $75,000 for reports, Reuters said today in a special report that could call the Fed's reputation for secrecy into question.

The Fed declined comment, according to Reuters. But that might not fly with Congress, which has the ability to force Fed chief Ben Bernanke to explain himself. Senator Carl Levin, are you listening?

On August 19, just nine days after the U.S. central bank surprised financial markets by deciding to buy more bonds to support a flagging economy, former Fed governor Larry Meyer sent a note to clients of his consulting firm with a breakdown of the policy-setting meeting.

The minutes from that same gathering of the powerful Federal Open Market Committee, or FOMC, were made available to the public—but only after a three-week lag. So Meyer's clients were provided with a glimpse into what the Fed was thinking well ahead of other investors.

Reuters said no one is accusing Meyer and his firm, Macroeconomic Advisers, of doing anything illegal. But it said critics question whether the Fed should be sharing information in a way that gives big investors an advantage over others.

"It's certainly not what Fed officials should be doing," Alice Rivlin, a former Fed governor and now a fellow at the Brookings Institute think tank, told Reuters. "The rules when I was there were you don't talk to anybody about anything that could be used for commercial purposes."