The Fed Continues to Stonewall the American People by Refusing to Disclose the Extent of Trading During the Pandemic by Fed Leaders and Staff

WASHINGTON, D.C.— Today, Dennis Kelleher, Co-founder, President, and Chief Executive Officer of Better Markets, issued the following statement announcing the launch of a real-time clock on its website www.bettermarkets.org that tracks the ongoing cover up by the Federal Reserve of the extent of personal trading by Fed leaders and staff during the pandemic while in possession of material nonpublic information:

“It has been 34 days since the shocking personal trading during the pandemic by Federal Reserve leaders was first reported by the media, and the Fed continues to stonewall requests to provide the American people with the most basic information about these egregious violations of the public trust. It is now clear that the Fed is trying to cover up this pandemic profiteering.  The Fed Cover Up Clock we are launching today will run until the Fed comes clean and provides the American people the transparency and information they deserve.”

“For example, 34 days have passed since the trading scandal broke, yet the Fed failed to disclose the most basic information about this pandemic trading, including:

(1) how many officials and staff at the Fed traded for personal profit during the pandemic while in possession of material nonpublic information;

(2) the dates Dallas Fed President Kaplan made his multiple multi-million dollar trades, which were supposed to be on his disclosure forms;

(3) the details of Vice Chair Clarida’s extremely well-timed trades beyond the simply the claim of a “pre-planned rebalancing”; and

(4) the details regarding Chair Powell’s personal sale of between $1,000,000-$5,000,000 from the Vanguard Total Stock Market Index on a very busy October 1, 2020.  According to his annual disclosure forms, Chair Powell has never made such a large trade, which is sizable relative to his reported net worth.

“Chair Powell has stated that the trust of the American people is essential for the Fed to effectively carry out its mission.  However, his conduct over the last 34 days has only eroded that trust more as he excused, denied or outright ignored this outrageous conduct, which included Fed leaders personally trading to enrich themselves while:

(1) in the middle of a crippling historic pandemic,

(2) in possession of material nonpublic information,

(3) the Fed had all hands on deck working overtime to prevent the collapse of the economy,

(4) the Fed was injecting $4+ trillion dollars into virtually every financial market and impacting the price of virtually every financial asset and product,

(5) millions of Americans were sick, hospitals were overflowing, and hundreds of thousands of Americans were dying, and

(6) tens of millions of Americans were being thrown out of work, facing economic devastation, and not knowing how they were going to feed their families or pay their rent.

“This unconscionable pandemic profiteering should have been immediately condemned and those who traded fired. In sharp contrast, Chair Powell chose to merely blame inadequate policies, while never identifying them, presumably because the policies are clear, explicit and applicable, as detailed here. While the Fed IG and the SEC are now investigating whether laws were broken, it’s not too late for Chair Powell to provide the American people with the facts and call in the Justice Department to help restore the credibility of the Fed so that it can earn back the trust of the American people.  Until then, the clock will run.”

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Better Markets is a non-profit, non-partisan, and independent organization founded to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.