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September 27, 2021

Boston Fed President Rosengren’s Early Retirement Is Too Little, Too Late

Chair Powell Must End the Cover Up and Come Clean With The American People: Disclose Everyone At The Fed Who Engaged in Pandemic Profiteering Trading

WASHINGTON, D.C.— Dennis Kelleher, Co-founder, President and Chief Executive Officer of Better Markets, released the following statement in connection with the announcement that Boston Fed President Eric Rosengren is retiring nine months early:

“Chairman Powell’s initial mistakes of failing to understand the seriousness of regional Fed Presidents’ trading during the pandemic while in possession of material nonpublic information and while hundreds of thousands of Americans were dying were bad enough.  But he is now compounding those mistakes with a serious failure of leadership to take decisive action to set and uphold what should be the high ethical and legal standards, not the lowest.  Frankly, there is currently no real leadership at the Fed, just people looking for bandaids for damage control.

“Chair Powell’s ongoing refusal to disclose to the American people all Fed officials and staff who traded during the pandemic while in possession of material nonpublic information is starting to look like a cover up.  The most egregious example is Dallas Fed President Kaplan who is stonewalling disclosure of the dates of his trades as well as whether or not he shorted the markets during the pandemic.  Worse, the two Fed Presidents we know about may well just be the tip of the iceberg of pandemic profiteering trading at the Fed.

“Chair Powell must end the cover up and immediately (1) condemn such actions and stand up for high ethical standards at the Fed; (2) order the Dallas Fed to publicly disclose the details of all of Kaplan’s trading; (3) accept Kaplan’s resignation or fire him for a failure of leadership, a loss of confidence, and multiple breaches of the current Code of Conduct; (4) order the prompt disclosure of anyone at the Fed who traded during the pandemic while in possession of material nonpublic information; (5) disclose all documents related to anyone seeking approval for such trading; (6) request the Department of Justice, the Securities and Exchange Commission, and the Fed’s Inspector General to conduct comprehensive independent investigations to determine if any laws were broken by any of this trading; (7) promptly conduct the previously ordered review of the Code and swiftly make changes so that the Fed sets the highest bar for ethics.

“For the Fed to believe that merely letting Rosengren resign nine months early is an adequate response to the pandemic profiteering only confirms they have learned nothing since the egregious scandal involving former Richmond Fed President Lacker.  This pandemic profiteering and stonewalling are serious breaches of faith with the American people.  The Fed’s attempt to sweep this scandal under the rug and move on only proves once again that the Fed needs significantly more transparency, oversight, and accountability imposed on it.”

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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.com.

 

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