Senator Warren Pushes SEC On Federal Reserve Stock Trading

Senator Elizabeth Warren, D-Mass., Has asked the Securities and Exchange Commission to initiate investigations to determine whether securities transactions made by senior Federal Reserve officials may have violated the misdemeanor rules ‘insiders.

In a letter to SEC Chairman Gary Gensler, Warren pointed to new revelations that Federal Reserve Vice Chairman Richard Clarida transferred between $ 1 million and $ 5 million from a bond fund to a fund. shares on February 27, 2020 – the day before the Fed chairman. Jerome Powell released a statement signaling possible action amid growing concern over the emergence of COVID-19 in the United States

WASHINGTON, DC – JULY 22: (LR) Senator Elizabeth Warren (D-MA) speaks during a press conference regarding extending eviction protections in the upcoming coronavirus bill, on Capitol Hill of the United States on July 22, 2020 in Washington, DC. Amid economic hardship

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Just a few weeks ago, Warren noted, revelations revealed that Dallas Fed chief Robert Kaplan traded millions in stock markets last year, while Fed chairman of Boston, Eric Rosengren, has completed several transactions involving real estate investment trusts. Kaplan and Rosengren both abruptly retired last week after Powell pledged to make trade rules tougher on Fed officials.

Now Warren says the SEC should check to see if any Fed officials have broken the law with their business activities.

Robert Kaplan, President and CEO of the Federal Reserve Bank of Dallas, left, (Photographer: Cooper Neill / Bloomberg via Getty Images), Federal Reserve Chairman Jerome Powell, center. (Susan Walsh / Pool via REUTERS / File Photo). Boston F (Cooper Neill / Bloomberg via Getty Images | Susan Walsh / Pool via REUTERS | Photo by Jessica Rinaldi for The Boston Globe via Getty Images)

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“Reports of this financial activity by Fed officials raise serious questions about possible conflicts of interest and reveal a contempt for public confidence,” the senator wrote, adding, “they also reflect the atrocious judgment. of these officials, and an attitude that personal profit is more important than the confidence of the American people in the Fed. “

Warren asked Gensler to investigate the extent, timing and rationale for transactions carried out by Fed officials, “the extent to which these transactions may have been influenced by non-public information in the possession of those carrying out the transactions. transactions “and” whether those transactions may have represented violations of provisions which prohibit individuals “from buying or selling a security while in possession of material non-public information”, citing the Sanctions Act 1984 against insider trading.

U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler Photographer: Andrew Harrer / Bloomberg via Getty Images (Photographer: Andrew Harrer / Bloomberg / Getty Images)

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Warren also continued her war path against Powell, whom she called “a dangerous man” last week. “It is not known why President Powell did not stop these activities, which eat away at the confidence and effectiveness of the Fed,” she wrote.

Warren pushed for legislation that would prohibit federal lawmakers, senior officials, White House staff, and other officials from holding individual shares. She is also seeking to replace Powell with a Democrat.