Fed policymakers’ trading to get more scrutiny

(Reuters) — Senator Elizabeth Warren on Monday called on the U.S. Securities and Exchange Commission to investigate trading by top U.S. central bankers, including that of two Fed bank presidents who resigned after public outcry over their transactions.

In a letter to SEC Chair Gary Gensler, Ms. Warren also cited trading by Fed Vice Chair Richard Clarida in February 2020, shortly before Fed Chair Jerome Powell issued a warning about risks from the coronavirus and pledged a Fed response if needed.

“The reports of this financial activity by Fed officials raise serious questions about possible conflicts of interest and reveal a disregard for the public trust,” Ms. Warren wrote in the letter, released publicly. “If these trades were based on Fed officials’ knowledge of non-public, market-moving information, they may have represented potentially illegal activity.”

An SEC spokesperson declined to comment.

The Fed launched its own review of ethics and trading rules last month after disclosures that Boston Fed President Eric Rosengren had traded real-estate securities and Dallas Fed President Robert Kaplan had traded millions of dollars of individual stocks last year even as the Fed undertook a rescue of the U.S. economy and financial markets with massive purchases of Treasuries and housing-backed bonds.

Both said they had followed the Fed’s trading rules.

Separately the Fed said Monday it had started discussions last week with its office of inspector general to look into whether trading by “certain senior officials” was in compliance with ethics rules and the law.

“We welcome this review and will accept and take appropriate actions based on its findings,” a Fed spokesperson said.

Mr. Rosengren left his job last week, citing a kidney condition. Mr. Kaplan is due to leave on Friday.

This website states: The content on this site is sourced from the internet. If there is any infringement, please contact us and we will handle it promptly.