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September 30, 2021

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

WASHINGTON, D.C.— Dennis Kelleher, Co-founder, President and Chief Executive Officer of Better Markets, released the following statement in connection with a letter he sent to Federal Reserve Chairman Powell:

“The Federal Reserve appears to be engaged not just in damage control, but in a cover up.  First, Fed Chair Powell continues to insist that the trading by the regional Fed presidents complied or appears to have complied with Fed policies when they clearly do not.  We detail in the letter the many explicit Fed policies (including those specific to regional Fed presidents) that were indisputably violated by that pandemic trading.

“Second, the Fed is allowing Dallas Fed President Kaplan to continue to hide his trading by not identifying the dates of his multiple multi-million dollar trades on his disclosure form as required.  This stonewalling is an insult to the American people and the Fed must order the disclosure of this information immediately.

“Third, the American people have no idea if the trading by a few regional Fed presidents is all there was or if they are just the tip of an iceberg of widespread trading by Fed personnel while the pandemic was killing hundreds of thousands of Americans and throwing tens of millions out of work.  The Fed must disclose the extent of the trading during the pandemic by everyone who was in possession of material nonpublic information.

“Fourth, the Fed cannot investigate itself after its leadership already publicly prejudged the actions of the regional Fed presidents and incorrectly criticized its own policies as deficient.  Such clear signaling to the leaders’ subordinates and direct reports robbed an in-house investigation of any credibility. Chair Powell must ask 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 trading during the pandemic.

“Finally, merely allowing Fed leaders to resign when they violate Fed policies and engage in misconduct (as was also done with former Richmond Fed President Lacker) sets an ethics standard that is far too low for the nation’s central bank.  As required by the Fed’s clear and explicit policies, Fed leadership should model the highest ethical behavior and then hold themselves to that standard.  As important, they must be held accountable when they fall short, and there must be meaningful consequences, not a cover up as is happening here.

“To begin to restore the faith of the American people, the confidence of the Fed’s own staff, and the moral authority of the Fed to do its job, we urged Chair Powell in the letter to take immediate, decisive, and clear action to end the cover up and set and enforce the highest standards.”


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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