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July 28, 2022

Everything You Need to Know About the Federal Reserve Trading Scandal

Exposing Pandemic Profiteering at American’s Central Bank, Leadership Failures & Cover Up

As hundreds of thousands of Americans were dying and tens of millions were being thrown out of work due to a catastrophic pandemic that gripped the country with fear, some of the most senior officials at the U.S. central bank – the Federal Reserve System – were making dozens of multimillion-dollar trades, seeking to personally profit in 2020 during the disaster. Since the Wall Street Journal first reported this outrageous conduct that violated the public trust if not Fed policy and the law, Better Markets has been leading the charge in calling for transparency, leadership and accountability.

That has been, to some extent, successful: Better Markets was the first to call for two of the regional Fed Presidents who engaged in the most egregious pandemic trading to resign or be fired, and they resigned.  Unfortunately, the Fed – led by Chair Powell – has otherwise engaged in a misleading, minimalist damage control campaign.  That has gone from misjudging the seriousness of the scandal to a failure of leadership to, now, what appears to be a full-blown cover up with no meaningful accountability.

On July 14, 2022, the Federal Reserve’s Inspector General released a report about his “investigation” into the matter. It was no surprise that the scope was very narrow and that it omitted key information and therefore is not credible.

The Fed, and Chair Powell in particular, appears to think that adopting a “see no evil; hear no evil; speak no evil” approach will allow them to sweep this scandal under the rug.  However, Chair Powell’s actions and nonactions speak louder than empty words.  We will not rest until the leadership of the Fed comes clean with the American people about their misconduct and holds their leaders accountable for this shocking violation of the public trust, which must include:

  1. Condemn any pandemic profiteering trading as violating the Fed’s clear and explicit policies;
  2. Demand that everyone at the Fed set and meet the highest ethical standards;
  3. Order the prompt disclosure of everyone at the Fed who traded during the pandemic while in possession of material nonpublic information – the American people are entitled to know if the regional presidents were just the tip of the iceberg of widespread trading;
  4. Disclose all documents related to anyone seeking approval for such trading;
  5. Require the Dallas Fed to disclose the dates of his trading on his disclosure form (as he was already required to do but is stonewalling) or fire him;
  6. Request the Department of Justice, the Securities and Exchange Commission, and the Fed’s Inspector General conduct comprehensive independent investigations to determine if any laws were broken by any of this trading; and
  7. Conduct the previously ordered review of the Code, publicly release all findings, and swiftly implement any necessary changes to ensure that Fed officials are held to the highest standards.

Better Markets Key Information

Here are the actions Better Markets has taken demanding transparency, accountability, and an end to the cover up from the Fed for its ongoing breach of trust, leadership failures, violations of policy and apparently the law:

VICE CHAIR RICHARD CLARIDA STEPS DOWN: His resignation confirms there is an epidemic of ethical and legal violations at the highest levels of the Fed.

RENEWED CALL: for the Fed to end the cover up and the Department of Justice to investigate.

EXPLOSIVE DEVELOPMENT REPORTED: A Fed Official’s 2020 Trade Drew Outcry. It Went Further Than First Disclosed.

KEY DEVELOPMENT: FED ETHICS OFFICER SAID STOP TRADING: Fed Ethics Office Warned Officials to Curb Unnecessary Trading During Rescue

URGED the Fed to end the cover up and disclose all the information and documents related to those at the Fed who traded during the pandemic, amid the Fed’s announced new trading policies: The Fed’s Announcement of New Trading Restrictions is a Good Start, But The Have to be Broader and Cannot be Used to Whitewash the Prior Pandemic Trading; the Stonewalling Must Stop

HIGHLIGHTED the many problems with Chair Powell’s personal trading during the pandemic, including his violations of Fed policies and his crippling conflicts of interest and leadership failures

TRACKING in real-time exactly how long the Fed cover-up has been going on: Better Markets Launches a Real-Time “Fed Cover Up Clock”

CALLED for independent investigations by the Fed’s IG, the SEC, Congress and the DOJ: Better Markets Welcomes SEC Investigation of Federal Reserve Pandemic Trading and Confirmation of Applicability of Insider Trading Laws

APPLAUDED reports that Fed is working with the Office of Inspector General in its review of trades made by senior central bank officials during the pandemic: Better Markets Welcomes Addition of Inspector General to Review Senior Fed Officials’ Trading

DEMANDED an end to the cover up by admitting that the trading violated clear fed policies, holding Fed officials accountable, disclosing all the information & calling for a credible independent investigation in a letter to Fed Chair Powell & press release: The Fed Trading Scandal Cover Up Must End: The Pandemic Trading Violated Clear Fed Policies and the Fed Must Tell The American People Who Else Traded During the Pandemic

CALLED OUT Fed Chair Powell’s grossly minimalist actions, demanded real transparency and accountability: 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

CRITICIZED Fed Chair Powell’s evasive, incomplete & misleading FOMC press conference answers: Fed Chair Powell’s “See No Evil; Hear No Evil; Speak No Evil” Responses to Key Questions About Fed Leaders’ Pandemic Profiteering Trading Raises Serious Questions About His Leadership

DEMANDED Fed Chair Powell come clean with the American people about the pandemic profiteering trading at the FOMC press conference: Questions That Should Be Asked of Federal Reserve Chairman Powell About the Pandemic Profiteering Trading Scandal

URGED the resignation or firing of the regional Fed presidents in a letter to Fed Chair Powell & press release: The Fed Cannot Have a “Do As I Say, Not As I Do” Policy Regarding Legal and Ethical Compliance; It Has to Lead By Example and Terminate Any Fed President Who Engaged in Pandemic Profiteering

DEMANDED disclosure and accountability in a letter to Fed Chair Powell & press release: Fed Chair Powell Must Disclose All Pandemic Profiteering Trading By All Fed Officials and Seek Independent DOJ, SEC and IG Investigations

Key Media Articles

“Federal Reserve Inspector General Finds Powell, Clarida Didn’t Trade Improperly”
Wall Steet Journal, July 14, 2022

“Fed inspector general probe clears Powell, Clarida of violating laws”
Washington Post, July 14, 2022

Top Democrat says the Fed must release more details on its trading scandal.
New York Times, January 10, 2022

New Disclosures Revive Questions About Fed Policy Maker’s Trades
Wall Street Journal, January 6, 2022

Dallas Fed begins search for new president, hires search firm
Reuters, November 17, 2021

Powell commits to ensuring trading scandal never happens again at Federal Reserve
Yahoo Finance, November 4, 2021

The Federal Reserve’s ethics scandal is not resolved
The Hill, November 3, 2021

Federal Reserve clampdown on staff trading turns spotlight on other central banks
Financial Times, November 1, 2021

Financial self-dealing is rotting our government
The Hill, October 28, 2021

Fed imposes sweeping new limits on policymakers’ investments
Associated Press, October 21, 2021

Ethics office warned officials about unnecessary trades
The Hill, October 21, 2021

Jerome Powell Sold More Than a Million Dollars of Stock as the Market Was Tanking
The American Prospect, October 18, 2021

Elizabeth Warren Doesn’t Get Fed Trading Ban Proposal by Oct. 15 as Requested
Bloomberg, October 18, 2021

Fed’s Embarrassing Ethics Scandal Spurs Calls for More Oversight
Bloomberg, October 14, 2021

Clarida Traded Into Stocks on Eve of Powell Pandemic Statement
Bloomberg, October 4, 2021

Inspector General probing whether Fed official trades broke ethics rules or the law
CNBC, October 4, 2021

The Federal Reserve Needs to Get Its Ethics Straight
Bloomberg, September 30, 2021

Amid Trading Controversies, Public Trust in Federal Reserve Hits New Tracking Low
Morning Consult, September 29, 2021

Fed Officials Under Fire for 2020 Securities Trading Will Resign
New York Times, September 27, 2021

Fed resignations don’t blunt calls for broader ethics changes
Reuters, September 27, 2021

Actions by Others Demanding Fed Accountability

Pam and Russ Martens at has been dogged on exposing and detailing the egregious misconduct at the Fed.  Highlights are below, but you should sign up for email alerts to stay current:

They have also focused on the most outrageous trading by Dallas Fed President Kaplan here:

The Revolving Door Project has also done excellent work on the Fed’s misconduct.  It issued a report on September 30th analyzing the financial disclosure forms filed by Federal Reserve Chairman Jerome Powell, Vice Chair for Supervision Randal Quarles, Vice Chair Richard Clarida, member of the Federal Board of Governors Lael Brainard. The report found that Brainard was the only member of this group who “made no transactions whatsoever, meaning that she avoided any potential conflicts of interest in her policymaking”. Read more HERE.

The Federal Reserve disclosed that it had ZERO documentary support for Chair’s claims about his trading in a FOIA response it sent to the Revolving Door Project late on the Friday afternoon before Thanksgiving. Read more HERE.



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