Office of Inspector General to review whether Fed officials' trading activity broke ethics rules or the law

The Federal Reserve is in discussions with the Office of Inspector General in its review of 2020 trading activity by a handful of central bank officials to determine if those transactions met ethics standards and did not break any laws.

The addition of the Inspector General's office adds weight to a growing controversy at the Fed after a series of financial disclosures showed that Vice Chair Richard Clarida, Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren all traded in securities throughout 2020.

Those transactions, some of which totaled millions of dollars, has draw ire from Capitol Hill and concern that central bank officials may have traded based on nonpublic information as the Fed embarked on emergency measures to help save the U.S. economy from the Covid-19 recession.

"As part of our comprehensive review, we began discussions last week with the Office of Inspector General for the Federal Reserve Board (OIG) to initiate an independent review of whether trading activity by certain senior officials was in compliance with both the relevant ethics rules and the law," a Fed spokesman told CNBC. "We welcome this review and will accept and take appropriate actions based on its findings."

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