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The Federal Reserve’s inspector general concluded yesterday that financial trades made several years ago by Chair Jerome Powell and Richard Clarida, then the vice chair, did not violate any laws or ethics rules, the Associated Press reported. “We did not find evidence to substantiate the allegations that former Vice Chair Clarida or you violated laws, rules, regulations, or policies related to trading activities as investigated by our office,” Inspector General Mark Bialek said in a July 11 letter to Powell, released yesterday. At the same time, the letter said the investigation of the presidents of two regional Federal Reserve banks who stepped down after their trading activities came to light remains ongoing. The investigation stemmed from revelations last year that several Fed officials had bought and sold stocks, real estate investment funds and other securities during periods of sharp market turmoil in the spring of 2020 after the pandemic had erupted. The trades occurred during a time when the senior officials were privy to discussions about Fed decisions that would likely affect those markets. The transactions created the appearance of impropriety, Powell has acknowledged. The Fed also adopted sweeping new rules that sharply limit officials’ trading activities. The inspector general’s report said that Clarida acknowledged last fall that he had omitted four trades from financial disclosure forms. He filed amended forms with the federal government’s Office of Government Ethics, which concluded that the trades, in several index-style investment funds, did not constitute conflicts of interest.

Marble Ridge Capital founder Daniel Kamensky was given the green light to practice law in New York again, barely a year after he was convicted of fraud in trying to acquire Neiman Marcus Group Inc. assets out of bankruptcy, Bloomberg News reported. A New York court on Tuesday granted Kamensky’s application for reinstatement to the bar. His law license was suspended last September, a few months after he was sentenced to six months in prison for bankruptcy fraud. He was released after serving a little more than two months. Kamensky declined to comment. He began his career as a lawyer with Simpson Thacher & Bartlett before moving to Lehman Brothers and then Paulson & Co. He launched Marble Ridge in 2015. He now serves on the advisory board of the Creditor Rights Coalition, a nonprofit group established to protect the rights of creditors and “promote transparency, accountability, and equality of treatment for similarly situated creditors to ensure fair and robust stakeholder participation in bankruptcy proceedings.” Kamensky pleaded guilty in February 2021 to abusing his position as a member of Neiman Marcus’s creditors’ committee to compel Jefferies Financial Group Inc. to abandon a bid for a piece of the insolvent department store chain’s online retail unit. Kamensky’s plan was to have Marble Ridge acquire them instead for less. The bankruptcy judge asked prosecutors to investigate Kamensky’s conduct, and he became perhaps the first distressed-debt investor to be prosecuted for abusing his position on a bankruptcy committee. Marble Ridge shut down and started returning money to investors in August 2020, the month before Kamensky was charged. A day after Kamensky’s arrest, the judge approved a plan that handed ownership to Neiman Marcus creditors in return for forgiving about $4 billion of the chain’s $5.5 billion in debt.

By the spring of 2020, the lottery lawyer wasn’t sure the walls were necessarily closing in. The FBI had started interviewing his insta-millionaire clients, though, and things didn’t look good. The jackpots several winners had entrusted him to invest seemed to be dwindling, and Jay Kurland wasn’t sure how much they blamed him, Bloomberg News reported. Shortly before 9 a.m. on June 19, he hopped on the phone with his neighbor and business partner Francis Smookler, a tanned, easy-living ex-stockbroker. “My Staten Island clients are very concerned,” Kurland said, singling out one couple. “You know, the visits, combined with the lack of payments.” “Do you think that that’s going to explode into some big thing?” Smookler asked. “No,” Kurland replied. “At the end of the day, we made, we’ve got bad business moves, but it was nothing criminal.” There were others in this ultra-specialized field, such as Kurt Panouses of Indialantic, Fla., the so-called Powerball Lawyer. But Kurland was America’s foremost lotto-winner whisperer. Morning shows would book him for soft-focus segments; thelotterylawyer.com and @lotterylawyer were his. In 2018 he started representing the biggest solo lottery winner of all time, a woman who’d bought a $1.5 billion ticket at a convenience store in South Carolina. As Kurland racked up more and richer clients, he started looking for more innovative ways to multiply their money. Side hustles emerged, and the cast of characters he worked with began to look less vanilla: In addition to his neighbor and business partner Francis Smookler and Frangesco Russo, there was Christopher Chierchio, who ran a Staten Island plumbing business and has been identified in the New York tabloids as a Genovese crime-family soldier; Greg Altieri, a wholesale jeweler turned Ponzi schemer; and Kurland’s own brother-in-law, Scott Blyer, aka DrBFixin, a cosmetic surgeon specializing in Brazilian butt lifts. It all came to a head when, on the morning of Aug. 18, 2020, Kurland, Smookler, Russo, and Chierchio were booked on multiple counts of wire fraud and money laundering, accused of bilking three marquee lottery winners out of more than $100 million. Smookler and Russo were also accused of extortion. Federal prosecutors in New York laid out a scheme predicated on the trust Kurland had built with clients who were wildly unprepared for the opportunities and pitfalls of sudden wealth. Following Kurland’s investment advice, lottery winners plowed cash into high-interest lending businesses run by his associates, for which he allegedly received secret kickbacks.