The Administrative Regulatory disciplinary process of the United States Federal Reserve Bank is virtually unknown outside of a small circle of bankers, financial executives and lawyers. The United States Federal Reserve maintains the authority to discipline bankers and financial executives as it relates to the banking industry. Discipline can range from a warning or fine all the way to a lifetime bar from the banking industry. In a United States Federal Reserve Bank disciplinary matter, the Respondent has the right to a Hearing before an Administrative Law Judge. However, final decisions and orders are made by the actual Federal Reserve Board of Governors. Board of Governors decisions can be appealed to the United States Circuit Court of Appeals.
The United States Federal Reserve Bank has a webpage dedicated to Administrative Law Enforcement Actions. https://www.federalreserve.gov/apps/enforcementactions/. The New York Times recently reported on the seldom used United States Federal Reserve Bank Administrative Law disciplinary process. The New York Times followed one case of a banker charged with numerous Administrative Law Violations before the United States Federal Reserve Bank. https://www.nytimes.com/2017/08/21/business/dealbook/fed-in-house-court.html.
Out of almost 400 enforcement actions in the past five years, just six have resulted in a contested Administrative Law disciplinary proceeding. The unique procedures and rules of the Federal Reserve Bank Administrative Law disciplinary process require an attorney skilled in Federal Administrative Law. In many respects, these Administrative Law disciplinary procedures operate in a similar manner as disciplinary proceedings for other federal financial regulatory agencies such as the Unites States Securities & Exchange Commission (SEC). Furthermore, in addition to other discipline, fines can total in the hundreds of thousands of dollars, if not higher.
Bankers and other financial professionals facing United States Federal Reserve Bank Administrative Law discipline often face the following violations: Breach of Fiduciary Duty, Engaging in Unsafe or Unsound Banking Practices and Violating the Use of Confidential Information. Individuals facing a lifetime ban from the banking industry need an experienced Federal Administrative Law attorney to defend their occupation. Just because the United States Federal Reserve Bank files a disciplinary action against a banker or financial industry professional does not necessarily mean an Administrative Law Hearing will occur. The United States Federal Reserve Bank will often enter into settlement agreements with Respondents.
If you are a banker or financial industry professional facing a Federal Reserve Bank cease and desist order, corrective action directive, prohibition order, or other disciplinary action, contact a Federal Administrative Law Attorney for representation.