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House panel issues subpoena to Fed over 2012 information leak

The chairman of a U.S. congressional committee on Thursday subpoenaed Federal Reserve documents and communications related to a 2012 leak of information related to monetary policy, ramping up his attack of the central bank's handling of the case.

Republican Jeb Hensarling of Texas, who chairs the U.S. House of Representatives Financial Services Committee, said in a release that the Fed failed to comply with document requests from the panel related to market-sensitive information that was leaked to a private financial newsletter.

Representative Jeb Hensarling, a Republican from Texas and chairman of the House Financial Services Committee
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Representative Jeb Hensarling, a Republican from Texas and chairman of the House Financial Services Committee

The leak involved Medley Global Advisors, a research firm that unveiled details of a September 2012 Fed meeting a day before the central bank's own record of the discussions was made public.

Hensarling wrote to Yellen in March to express his concern about a lack of response by the Fed.

Yellen responded that same month, saying that the central bank's internal watchdog, the office of the inspector general, was investigating the matter. The Justice Department is also investigating the matter.

On May 4, Yellen sent a letter to Hensarling and Representative Sean Duffy, chairman of a Financial Services subcommittee, saying that she met with a person at Medley in June of that year but that she did not convey any confidential information.

Yellen said in the letter that she has directed staff to provide Hensarling and Duffy with names of staffers who attended the September 2012 Fed policy setting meeting.

But Hensarling on Thursday said the Fed has not responded to a request by Duffy that all records related to leak be released.

"The Federal Reserve to date has not provided any of the documents requested by the committee and has not provided any legally justifiable reason for its failure to comply with the committee's document request," Hensarling's statement said.

A Fed spokesman said on Thursday that the agency had provided the committee with information about the breach and that its inspector general and Justice Department were investigating.