The Deal Book Blog reports that Friedman’s resignation letter states:
Mr. Friedman said his public service on the board was being characterized as “improper” despite his compliance with the rules. “The Federal Reserve System has important work to do and does not need this distraction,” he said.
The announcement came after it was revealed that Friedman remained on the board of Goldman Sachs, that he holds a substantial amount of shares in that company and that has continued buying shares even after Goldman came under the Federal Reserve’s supervision.
“Today, although I have been in compliance with the rules, my public service motivated continuation on the Reserve Bank Board is being mischaracterized as improper,” Friedman wrote in his resignation letter. “The Federal Reserve System has important work to do and does not need this distraction.”
In December Friedman brought 37,300 shares of Goldman worth at that time $3 million. Those shares are now worth $17 million according to the Wall Street Journal. He did not check with the Fed about those buys. In January Friedman picked up another 15,300 shares the day after the waiver was granted.
“With respect to Steve’s purchases of Goldman shares in December of 2008 and January of 2009, which have been the object of some attention lately, it is my view that these purchases did not violate any Federal Reserve statute, rule or policy,” Baxter said in a statement.