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Senator Elizabeth Wallon urged the Securities and Exchange Commission to investigate the stock trading of officials working for the Federal Reserve.
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Senator Elizabeth Warren called on the US Securities and Exchange Commission to investigate whether the stock trading of senior Federal Reserve officials violated insider trading rules.
The Massachusetts Democrat wrote in a letter to SEC Chairman Gary Gensler: “Fed officials have seriously questioned the possible conflicts of interest in the report of this financial activity and revealed a disregard for public trust.” “They also reflect the brutal judgments of these officials and the attitude that personal profiteering is more important than the American people’s confidence in the Fed.”
Warren quoted a Bloomberg News report on Friday as saying that Fed Vice Chairman Richard Clarida’s 2020 financial disclosures showed that the policy will be possible in a statement issued by Chairman Jerome Powell (Jerome Powell). The day before the action was marked as a pandemic, he traded $1 million to $5 million in bond funds to equity funds to deteriorate. After the exposure of trading activities last year, two regional Fed presidents recently announced their departures.
A spokesperson for the US Securities and Exchange Commission declined to comment on Warren’s letter, and a spokesperson for the Federal Reserve also declined to comment.
In a statement on October 1st, a Fed spokesperson said on behalf of Clarida that these transactions were issued in mid-May and were “a pre-planned rebalancing of his account, similar to what he did in April 2019. And the rebalancing of the report” and “being executed before he participated in the review of the Fed’s response to the emergence of the coronavirus, not during the power outage.”
The end of February 2020 was a period of extreme volatility in financial markets, as investors encountered the threat of a pandemic spreading in the United States. In the six days ending on February 27, the S&P 500 Index fell by 10% from its historical high at that time. % Above. At the same time, as traders began to expect the Fed to cut interest rates, the bond market rebounded strongly, and the yield on the US 2-year Treasury bill plummeted.
Warren said: “There is no legitimate moral or financial reason for him or any other government official to participate in these dubious market conspiracies while obtaining non-public information and the power to make decisions that have extraordinary effects on the market and the economy.”
Dallas Fed President Robert Kaplan and Boston’s Eric Rosengren announced on September 27 that they would resign after their trading activities were reviewed last year. Rosengren cited long-term and deteriorating health in explaining his early retirement.
Kaplan disclosed multiple transactions of more than $1 million in 2020. Rosengren’s transactions in real estate investment trusts, some of which are invested in mortgage securities purchased by the Federal Reserve beginning in 2020, have also raised questions.
The Federal Reserve has established clear guidelines for the trading activities of policymakers. Its “Guidelines for Voluntary Conduct for Senior Officials” stated that “they should be cautious to avoid participating in any financial transactions because the timing may cause actions that appear to be based on inside information about the Federal Reserve’s deliberations and actions.”
Powell has announced a review of the policy, aimed at tightening the policy. He stated at a press conference last month that the existing guidelines are “not enough to maintain the task of public trust.”
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