While sifting through the results of the stress tests, the traders were stunned by a piece of breaking news.

After hours they learned Stephen Friedman will step down as chairman of the New York Federal Reserve's board of directors by the end of the year.

Friedman, a retired chairman of Goldman Sachs and currently chairman of private equity firm Stone Point Capital, has been chairman of the New York Fed's board since January 2008.

Some traders including Fast Money's Karen Finerman speculatre the decision may have something to do with his ownership of Goldman Sachs shares.

Regional Fed bank directors are not allowed to own shares of bank holding companies, a status that Goldman Sachs unexpectedly gained in September following the failure of its rival Lehman Brothers.

Friedman, however, obtained a waiver regarding his Goldman shares until the end of this year. And it's worth noting A New York Fed spokesperson declined to comment on whether that was, in fact, behind Friedman's decision.

Fed insiders say that the Fed has been reviewing what to do about directors who found themselves in the position of holding shares in firms that are now bank holding companies.

The board appoints three of the nine board directors at each of the country's 12 regional Fed banks, including the chairman and deputy chairman, in an effort to ensure a cross-section of public representation.

For regional Fed directors, the ban on bank stock only applies to the three directly appointed by the board. The other six directors are either bankers themselves, or appointed by banks in the regional Fed district, and may own bank stock.

Friedman, currently chairman of the President's Intelligence Advisory Board, previously worked as a senior economic adviser to President George W Bush.

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Trader disclosure: On May 7th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Seymour Owns (AAPL), (BAC), (F), (TX); Seygem Asset Management Is Short (DVN); Finerman's Firm Owns (CSCO); Finerman's Firm And Finerman Own (BAC) Preferred Shares And Are Short (BAC); Finerman's Firm Owns (C) Preferred Shares And Is Short (C); Finerman's Firm Owns (MSFT) And Owns (MSFT) Put Spreads; Finerman's Firm And Finerman Own (WFC) Preferred Shares, Finerman's Firm Is Short (WFC); Finerman's Firm Is Short (IJR),(MDY) (SPY), (IWM), (USO), (BBT)

Terranova Owns (GENZ), (ABT), (XBI); Terranova Is Long (DIS) Call Spreads; Terranova Is Short June Crude Oil; Terranova Is Short (JPM), (WYNN), (X), (MS), (JOYG), (HES), (BRCM), (POT); Terranova Is Short (IBM) Call; Terranova Is Short (XOM) Call Spreads

Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO; Virtus Diversifier PHOLIO Owns (IGE), (DBC), (DBV); Terranova Works For (VRTS); Terranova Is Chief Alternatives Strategist Of Virtus Investment Partners, Ltd.

Virtus Investment Partners Owns More Than 1% Of  (ABD), (ARE), (CAL), (DLR), (EPR), (EXR), (IGE), (MEE), (DBC), (DBV), (DBA), (SKT), (UA), (CLB), (WBMD): Virtus Investment Partners Owns More Than 1% Of St Mary Land & Exploration Co: Virtus Investment Partners Owns More Than 1% Of  Seagate Tax Refund Rights

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