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September 22, 2021

Questions That Should Be Asked of Federal Reserve Chairman Powell About the Pandemic Profiteering Trading Scandal

Wednesday, September 22, 2021
Contact: Evelyn Swan at 202-618-6433 or

WASHINGTON, D.C.— Dennis Kelleher, Co-founder, President and Chief Executive Officer of Better Markets, released the following questions that should be asked of the Chairman of the Federal Reserve, Jay Powell, regarding the trading scandal engulfing the central banks: 

Has the trading activity undermined the trust of the American people in the Federal Reserve?

  1. You have said that “the trust of the American people is essential for the Federal Reserve to effectively carry out [its] important mission.”  How can the American people trust the Fed when some of its most senior leaders have been engaging in very significant trading for their own personal gain throughout the pandemic? 
  2. Do you think the profit-seeking trading of President Kaplan and/or Rosengren in the middle of the pandemic as hundreds of thousands of Americans were dying and tens of millions were thrown out of work was what leaders of the U.S. central bank should have been doing?
  3. How can the American people trust the Fed not knowing if dozens or hundreds of others were doing the same thing?

Does trading in investments by high-ranking Fed officials with inside information at least create the appearance of conflicts of interest and possibly violate some standards of conduct or laws?

  1. Do you agree that the Fed’s code of conduct doesn’t just require compliance with FOMC blackout periods but also that leaders and staff “be careful to avoid any dealings or other conduct that might convey even an appearance of conflict between their personal interests, the interests of the system, and the public interest”? 
  2. Do you think that the trading of President Kaplan and/or Rosengren created at least the appearance of a conflict of interest?
  3. Given the Fed’s many extraordinary actions and activities since the pandemic started, increasing its balance sheet by more than $4 trillion, wouldn’t you agree that the leadership of the Fed and many of the staff were often in possession of material nonpublic information and therefore should not have been trading, even at times outside the FOMC blackout period?
  4. Don’t you agree that the value of most if not all financial assets, including those being traded by those Fed officials, were impacted by the Fed’s actions in 2020, including (a) dropping interest rates to near zero, (b) flooding the financial system with trillions of dollars, and (c) creating numerous programs to support various financial products and markets?

Did the trading activity violate the spirit of the Fed’s code of conduct and high standards of ethical behavior by public officials?

  1. Do you think that this trading activity followed the letter and spirit of the Fed’s code of conduct and the law?
  2. Shouldn’t leaders at the Fed conduct themselves according to the highest ethical and legal standards, not just follow the technical letter of the law?
  3. Shouldn’t the Fed’s internal review and approvals process hold Fed leaders to the highest ethical and legal standards and at least flag trading activity that may be in conflict with the letter or the spirit of the Fed’s code of conduct and the law?

Isn’t the American public entitled to know the facts surrounding this trading activity, including who traded what and when?

  1. If you looked at President Kaplan’s disclosures, you’ve seen that he has not identified the dates of many of his trades, merely saying “multiple” under the dates.  No one can therefore determine when he traded what securities.  Do you find such disclosures to be sufficient and don’t the American people have a right to know the full information and see for themselves?
  2. Do you know if any of the leaders or staff at the Fed shorted the markets and should leaders or staff at the Fed be allowed to short the markets at all since the pandemic hit or even more generally?
  3. Do you know that the Dallas Fed has several times refused to disclose whether or not President Kaplan shorted the markets?

Does the trading activity cast serious doubt on the judgment and moral authority of those involved?

  1. Given that a primary responsibility of the Fed and its regional banks is to supervise and regulate the country’s largest banks, including their compliance and legal policies, don’t you think that the trading activity of the regional bank Presidents raises questions about their judgment and ability to fulfill their leadership responsibilities?
  2. Don’t you think that this type of trading activity undermines the credibility of the Fed when it seeks to provide supervisory criticisms of banks’ ethics and compliance policies?

Is there any reason why the Fed shouldn’t ensure, at a minimum, immediate disclosure of the basic facts and also ask for independent, outside investigations to restore the trust of the American people in a critical governmental institution?

  1. If you want the trust of the American people, why won’t you release all the trading information by anyone in possession of material nonpublic information and all documents related to any of their trading activity approvals?
  2. Given that the Fed’s internal investigation in 2017 of the former Richmond Fed President for his egregious handling of confidential information was a failure and that many Fed staff have already exonerated the trading activity of their leaders during the pandemic, how can the American people trust the Fed to do a credible internal investigation?
  3. Don’t you think that having the SEC, DOJ and IG conduct a full investigation here will help restore the trust of the American people?

What does prior history suggest about your ability to deal effectively and credibly with the current scandal?

  1. Why didn’t you demand a review of the Fed’s ethics and compliance policies and practices when you learned in 2017 that former Richmond Fed President Lacker violated Fed policies regarding the handling of confidential information by leaking the most sensitive FOMC information to a hedge fund? 
  2. Considering that Lacker leaked information and actually lied to the Fed’s internal investigators, which resulted in his reappointment as the Richmond Fed President, why did you think that simply letting him resign was an adequate consequence and one that would discourage unethical behavior by other Fed leaders in the future?


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

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