U.S. Fed delays probe deadline of premature March minutes release

WASHINGTON Fri Jun 21, 2013 1:51pm EDT

The Federal Reserve building is seen in Washington June 19, 2012. REUTERS/Yuri Gripas

The Federal Reserve building is seen in Washington June 19, 2012.

Credit: Reuters/Yuri Gripas

WASHINGTON (Reuters) - The U.S. Federal Reserve said on Friday it would miss a deadline to finish an investigation into its inadvertent release in April of market-sensitive policy documents, which were sent out a day early in an embarrassing lapse of central bank security.

In a slip the Fed said was accidental, a member of staff emailed minutes of its March policy meeting to over 100 congressional staffers and bank lobbyists on Tuesday, April 9, around 24 hours ahead of the scheduled release.

These top-secret documents give hints on future Fed action and can have major impact on global financial markets. That said, market movements after the March release were fairly mute compared with the volatility caused by minutes of other meetings.

The Fed's Office of Inspector General said it pushed back the completion date of the probe until end-September from the end of second quarter. It made the disclosure in a regular update of work in progress.

Officials in the inspector general's office were not immediately available to clarify why the date was pushed back three months.

The Inspector General is looking into how the minutes are distributed to staff and to "evaluate the Board's management controls to prevent the early release."

The Securities and Exchange Commission and Commodity Futures Trading Commission both confirmed they were contacted by the Fed in connection with the premature release of the minutes, but have declined to comment further.

Among those who received the minutes early were people with email addresses that identified them as working for a number of financial firms, including Goldman Sachs Bank USA GS.UL (GS.N), Barclays Capital (BARC.L), Wells Fargo & Co (WFC.N), Citigroup Inc (C.N), UBS and JPMorgan Chase & Co (JPM.N), which trade on new information about U.S. monetary policy.

After discovering the breach early on April 10, the Fed decided to publish the minutes at 9 a.m. (1300 GMT), five hours ahead of the scheduled release time.

(Reporting By Alister Bull. Editing by Andre Grenon)

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