December 07, 2021

Warren Renews Call for Release of Information on Federal Reserve Stock Trading Scandal

Top Fed Officials Were Trading Stocks and Other Investments Despite Receiving Ethics Warnings at Height of the Pandemic

Fed Has Yet to Provide Senator Warren with Complete Information on Fed Officials’ Trades, Warnings from Fed Ethics Officers, and the New Fed Ethics Policy

Text of Letter (PDF)

WASHINGTON, D.C. — United States Senator Elizabeth Warren (D-Mass.) called on Federal Reserve (Fed) Chair Jerome Powell to immediately release information related to Fed officials’ trading scandals and warnings from the Fed ethics office against personal trading that they received as the Fed took dramatic steps to protect the economy at the height of the COVID-19 pandemic. 

In September 2021, reports indicated that high-ranking Fed officials had engaged in trades of individual stocks and other investments at the height of the pandemic; weeks later, reporting revealed that Fed officials were warned about the ethics risks of trading stocks, bonds, and other investments in March 2020. Following Senator Warren’s request for information, the Fed released an excerpt of the email warning officials to “avoid unnecessary trading for a few months as the Fed dived deeper into markets,” but the Fed has yet to release the full email or any other ethics guidance issued at the time. Senator Warren is asking the Fed to respond to her requests for critical information so Congress and the public can evaluate the full extent of trading in individual stocks by Fed officials, the extent to which Fed officials were warned of the risks from their trading, and whether the changes to the Fed’s ethics practices are sufficient to prevent future financial conflicts of interest. 

“I am writing to follow up on my earlier requests that the Federal Reserve (Fed) release additional information regarding its ethics scandal involving trades in stock, bonds, and other investments by Fed officials and the planned changes to the Fed’s ethics practices you announced in response to this scandal. Given the paucity of information you have provided to Congress and the public about trading by Fed officials and your response to these breaches of Fed ethics rules, it remains unclear if you have done enough to address this scandal and prevent the next one. I therefore ask that you respond in full to my request by December 13, 2021,” wrote Senator Warren.

As the ethics scandals involving top level Fed officials were revealed in September and October of this year, Senator Warren called out the culture of corruption and raised deep concerns over conflicts of interests that have undermined public confidence. She previously called on the SEC to investigate the extent of trading activity by high-level Federal Reserve officials and possible ethics violations. She also urged Regional Fed leaders to follow the robust and comprehensive ethics guidelines in her Anti-Corruption and Public Integrity Act. Senator Warren has long championed tighter ethics rules that prohibit all government officials from holding or trading stock that may be influenced by their agency, department, or actions.