### Former Fed Examiner Pleads Guilty to Insider Trading, Faces Up to 20 Years in Prison

A Chesterfield man, Robert Brian Thompson, confessed on Tuesday to running a four-year insider trading scheme, collecting over $700,000 by leveraging his position at the Federal Reserve Bank of Richmond. Thompson, 43, admitted in federal court to charges that could lead to a prison sentence of up to 20 years.

Standing before U.S. District Court Magistrate Judge Mark Colombell, Thompson pleaded guilty to felony counts of insider trading and false statements. The judge permitted him to remain free on bond until his sentencing on March 19.

Surrounded by his attorney Megan Rahman from Troutman Pepper and a small group of supporters, Thompson acknowledged using "material nonpublic information" from his job at the Fed to execute 69 trades involving shares in more than seven publicly traded financial institutions. His actions spanned from at least October 2020 through February 2023, amassing $771,000 in illegal profits which he will be required to forfeit.

Among the stocks he exploited were those of Capital One and New York Community Bancorp (NYCB), both of which he monitored in his role at the Fed. In one instance, Thompson used internal Fed emails in October of last year to discover that Capital One’s earnings would surpass market expectations. Hours before the bank released its earnings, he bought 7,500 shares for $678,000. Following the public disclosure, the stock price increased by 9%, earning Thompson a $79,000 profit.

In January of this year, Thompson profited from NYCB’s expected losses. Using non-public information, he learned about anticipated substantial losses due to loans related to NYCB’s acquisition of Signature Bank. He purchased 1,600 options for NYCB shares for $14,000 on January 29. Following the earnings announcement two days later, NYCB’s stock dropped 37%, leading to a $505,000 profit for Thompson, a staggering 3,745% return within a week.

Thompson’s actions violated federal regulations that expressly prohibit Fed employees in his position from trading in bank securities. Employees are mandated to regularly declare their financial assets, a requirement Thompson circumvented by lying about owning such stocks and options, though his portfolio was worth over $500,000.

Serving at the Fed from 2004 until early this year, Thompson's last role involved examining and regulating large banks with assets over $100 billion. His criminal activities were uncovered earlier this month by the U.S. Attorney's Office, and he also faces civil charges from the Securities and Exchange Commission, which generally takes a back seat to criminal proceedings.

The Richmond Fed issued a statement expressing cooperation with authorities and condemning Thompson’s violations of their policies on ethics and conflicts of interest. A spokesperson for the Federal Reserve Board emphasized their extensive measures to prevent misuse of confidential information, including outright prohibition on trading bank stocks and mandatory staff training.

By his guilty plea, Thompson forfeited his rights to both an indictment and an appeal. His case will proceed to Judge Hannah Lauck for final sentencing in March, handled by Assistant U.S. Attorney Thomas Garnett for the prosecution. Attempts to obtain comments from Thompson’s legal representatives, including John West from Troutman Pepper, were unsuccessful.