A former Federal Reserve Bank of Richmond senior supervisor faces 25 years in prison after pleading guilty Tuesday to insider trading and making false statements.
Robert Brian Thompson, 43, of Mosley, Virginia, made roughly $771,678 in personal profits through 69 trades made between October 2020 and February of this year, the Justice Department said.
But Thompson falsely indicated on his annual Form D, filed with the reserve bank, that he had no assets, including no equities in any publicly traded financial institutions, and that he had not engaged in activity that would be deemed a conflict of interest, violation of Richmond Fed policy or a violation of law, the DOJ said.
Thompson had access to confidential information, including stress test results and unreleased earnings data, as part of his job as deputy central point of contact for the Large & Foreign Banking Organizations.
In that role, he managed a team that conducted exams of U.S. banks with at least $100 billion in assets, except the eight largest, which are global systemically important financial institutions.
Prosecutors did not identify the seven financial institutions whose stock Mosley reportedly traded. But the Securities and Exchange Commission, in a lawsuit it filed against Mosley on Nov. 8, flagged two as New York Community Bank and Capital One.
Thompson bought put options on NYCB – essentially betting the bank’s stock would drop – in January, when he learned NYCB would post an unexpected $252 million loss, the SEC said in its lawsuit. Thompson made a 3,745.2% return on the trade, or $505,527, the agency said.
Thompson purchased Capital One shares – hours before a quarterly earnings release in October 2023 – after receiving an email from a Fed colleague that the bank’s results would exceed analysts’ expectations, the SEC said. The transaction generated $79,346 in profit for Thompson when the earnings went public, the agency said.
Thompson is set to be sentenced March 19. The insider trading count is punishable by up to 20 years in prison; the false statements charge carries up to five years.
The SEC said Tuesday it entered a consent agreement with Thompson that will yield a disgorgement penalty and civil fine.
The Federal Reserve's Office of the Inspector General is also investigating the case.
