Ex-Fed Advisor Gets 3 Years for Lying About China Ties

Prosecutors argued that sharing advance knowledge of Fed interest-rate decisions could have allowed Beijing to generate "enormous profits" from trading its roughly $1.5 trillion in U.S. Treasurys, according to the Justice Department. The case underscores the risk that a leak of Fed policy could tilt the Treasury market, which is the deepest government bond market in the world. A trader with advance notice of a rate decision could front-run the move, pocketing gains from yield swings.

Rogers had allegedly begun a clandestine relationship in 2017 with Hummin Lee, a Chinese intelligence operative he met at a conference in China, and conveyed Fed information during meetings in Chinese hotel rooms held under the guise of teaching academic classes. He printed restricted documents before traveling to China, emailing materials to his personal account after stripping classification markings, and forwarded sensitive information to a professor at Fudan University, the Justice Department release said. In exchange, he received university professorships and financial benefits, prosecutors said.

Asked directly in a February 2020 inspector general interview whether he had ever shared restricted Fed information outside the board, Rogers answered "never," according to the Justice Department.

China's foreign ministry did not respond to a request for comment. The sentencing comes as the Trump administration has intensified its pursuit of alleged economic espionage by Beijing. The case is a reminder of the value of insider information on the Fed's next move, which traders said could be exploited for profit in the market analysis of U.S. Treasuries and the dollar.