Judge halts Trump's attempt to fire Lisa Cook, orders her reinstatement

A federal judge has ruled President Donald Trump's attempt to fire Federal Reserve Governor Lisa Cook is illegal, and ordered her reinstatement.

U.S. District Judge Jia Cobb issued a temporary restraining order prohibiting Trump from removing Cook from her position on Tuesday, finding that she will likely succeed in her claim that the president was illegally trying to fire her and that her firing was depriving her of her procedural rights protected by the Constitution.

"At this preliminary stage, the Court finds that Cook has made a strong showing that her purported removal was done in violation of the Federal Reserve Act's 'for cause' provision," Cobb said in her ruling. "In addition, the Court finds that the removal also likely violated Cook's procedural rights under the Fifth Amendment's Due Process Clause."

Trump moved to fire Cook late last month on the grounds that she made allegedly false statements on mortgage agreements.

The president's move to remove Cook was swiftly met by accusations from critics and Democrats of attempting to grab power over the important independent monetary policy-setting agency.

Trump has been feuding for months with her boss, Federal Reserve Chair Jerome Powell, to lower interest rates. Despite the insults and demands from the American president, Powell, the Trump-nominated chair from his first term, has stood firm that economic policy will not be influenced by politics.

Cook -- the first Black woman to sit on the Reserve Board and the first purported "for cause" firing in the agency's 111-year history -- sued the Trump administration to prohibit her removal, arguing Trump was firing without cause and that permitting the president to do so would irreparably harming.

Cobb agreed with Cook on Tuesday, ruling that the basis of the so-called for cause provision for removal of a Board of Governors member are limited to actions taken in office and "whether they have been faithfully and effectively executing their statutory duties."

"'For cause' thus does not contemplate removing an individual purely for conduct that occurred before they began in office," Cobb said.

Cobb added that the court also agrees with Cook's argument "that preventing her from discharging her duties as a Federal Reserve Governor, a unique Presidentially appointed and Senate-confirmed role with significant responsibility, itself constitutes irreparable harm remediable only by her reinstatement."

She said that the public's interest is in the Federal Reserve's independence, which also weighs in Cook's favor for reinstatement.

Cook was nominated to the Federal Reserve by President Joe Biden and confirmed by the Senate in 2022.

On Aug. 15, Federal Housing Finance Agency Director William Pulte, a Powell critic, sent a criminal referral for Cook to Attorney General Pam Bondi, accusing Cook of falsifying documents by signing two separate mortgage documents for two separate properties that claim each is her primary residence. The two documents were allegedly signed two weeks apart during the summer of 2021, before she was on the Federal Board of Governors.

After Pulte made the criminal referral public, Trump called for Cook to resign, which she did not do.

Then in late August, Pulte filed a second criminal referral against Cook, concerning a 15-year mortgage document she signed in December 2021, stating the property was her "second home," but then weeks later calling it an "investment/rental property" on a U.S. ethics form.

Trump, who campaigned on using the office of the presidency to retaliate against his previous rivals, has since returning to the White House in January used executive powers to remove critics from influential positions. These actions included revoking security clearances from officials and law firms involved in his criminal cases and firing opponents, such as Erika McEntarfer, the Senate-confirmed head of the Bureau of Labor Statistics.

Along with Cook, at least two other Trump critics are being investigated for mortgage fraud -- New York Attorney General Letitia James and Sen. Adams Schiff of California.