Democratic Sen. Elizabeth Warren on Monday called for the Securities and Exchange Commission (SEC) to investigate stock market trades made by Federal Reserve officials.
Warren wrote a letter to SEC Chairman Gary Gensler, saying he should investigate the “ethically questionable transactions” made by three Federal Reserve members.
“I am writing to ask that the SEC investigate trading in securities by high-level Federal Reserve officials and determine if any of these ethically questionable transactions may have violated insider trading rules,” Warren wrote in the letter.
I’m calling on @SECGov to investigate if top Fed Reserve officials’ stock trades may have violated insider trading rules. Fed officials are entrusted to make decisions that affect all Americans & shouldn’t be engaging in transactions to enrich themselves.https://t.co/vgLeTtMM9E
— Elizabeth Warren (@SenWarren) October 4, 2021
Federal Reserve Vice Chair Richard Clarida was accused of moving between $1 million and $5 million out of a mutual fund and into two separate funds just one day before Fed Chairman Jerome Powell hinted at potential policy actions as the pandemic worsened on Feb. 28, 2021, according to Bloomberg.
The report follows the exit of two other officials, Boston Fed President Eric Rosengren and Dallas Fed President Robert Kaplan, who resigned from their posts after The Wall Street Journal alleged the two were actively trading personal stocks during the height of the pandemic. (RELATED: Elizabeth Warren Calls Filibuster Racist Months After Filibustering Tim Scott Police Reform Bill)
“This new report comes within weeks of disclosures revealing that Robert Kaplan, President of the Federal Reserve Bank of Dallas, ‘made multiple million-dollar-plus stock trades in 2020,’ and that Eric Rosengren, President of the Federal Reserve Bank of Boston, ‘listed stakes in four separate real estate investment trusts and disclosed multiple purchases and sales in those and other securities,” Warren wrote in the letter.
Clarida says that his trades were made public in May and that the transactions “were executed prior to his involvement in deliberations on Federal Reserve actions to respond to the emergence of the coronavirus and not during a blackout period,” a fed representative said in an email, according to CNBC.
Powell addressed the need for stricter insider trading rules on Sept. 22, saying, “We understand very well that the trust of the American people is essential for us to effectively carry out our mission,” according to CNBC. “And that is why I directed the Fed to begin a comprehensive review of the ethics rules around permissible financial holding and activity by Fed officials.”
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