Cailianshe (Shanghai, editor Xiaoxiang) reported that after the "stock speculation storm" broke out by the Federal Reserve officials who shocked Wall Street last year, Dallas Fed Chairman Kaplan and Boston Fed Chairman Rosengren both voluntarily resigned due to the scandal. At that time, Richard Claridah, vice chairman of the Federal Reserve , was also involved for a while. Now, the latest document information disclosed, one of the three major Federal Reserve giants whose term is about to end, seems to be extremely "insider trading suspicion"!
The latest revised financial declaration documents disclosed on Thursday showed that Clarida sold $1 million to $5 million on February 24, 2020, and on February 27, he bought back the fund of similar size.
. In the declaration documents initially disclosed in October last year, Clarida's buying transaction on February 27, but there was no record of the selling behavior on February 24 at that time.
In response, a Fed spokesman explained, "Vice Chairman Clarida found negligence errors that need to be revised when reviewing the materials he submitted. He reviewed the transactions with our Office of Ethics and submitted the latest revisions to the 2019 and 2020 disclosure forms."
The spokesman also said that the newly disclosed transactions are in line with the Federal Reserve's ethical regulations on the transactions of officials, including the position type and the date of the transactions occurring - officials cannot trade during the "control" before the Fed's interest rate resolution.
A Fed ethics official also said in the disclosed letter, "I still believe that Clarida complies with applicable laws and regulations regarding conflicts of interest."
bought strangely within just three days after being sold?
However, even though the Fed tried to help Clarida clear the suspicion, the latest revisions disclosed above in still make people doubt whether the outgoing vice chairman knew or expected the announcement released by Fed Chairman Powell a day after his purchase (February 28).
Federal Chairman Powell had predicted in his speech on February 28 that the Fed was ready to take positive actions to cushion the impact of the epidemic on the economy and financial markets. Shortly after Powell issued the statement, the S&P 500 futures rose sharply on the same day. On March 3 of that year, the Federal Reserve urgently announced a 50 basis point interest rate cut and launched the largest market rescue plan in history.
As shown in the figure below, after Clarida sold on February 24, the iShares MSCI USA Min Vol Factor ETF fell for three consecutive days due to the pandemic panic. After Clarida rebuyed on the 27th, the ETF rebounded for several consecutive days since the 28th.
In these days, Clarida made a public speech on February 25 about the possible damage the epidemic may cause to the economy and the market. He said at the time, "It is too early to speculate on how the epidemic will affect the economic prospects."
In addition, on the morning of February 26, senior Fed officials, including Clarida and Fed Chairman Jerome Powell (Jerome Powell ), held an internal meeting to discuss how they should deal with the coronavirus outbreak. At 4:45 pm on February 27, Clarida and Powell also had a phone call.
Is it difficult to clear the suspicion of insider trading?
When Clarida's above buying transaction was initially disclosed last year, Clarida explained its trading motivation as a "rebalancing" from bonds to stocks. However, industry insiders pointed out that the latest disclosures showed that he quickly pulled out of the stock market and then returned to the stock market, which was obviously contrary to his original explanation.
White House
, CEO of Better Markets, a group that lobbies around to strengthen financial supervision, also said Thursday that Mr. Clarida's latest transaction information has aroused serious concerns about the possibility of officials using internal information to trade at the beginning of the outbreak.
He pointed out in a statement that "regardless, his (Clarida) trading behavior violates public trust."
After the stock trading storm broke out last year, Fed Chairman Powell had announced new investment guidelines in October, including banning officials from buying and selling during periods of market pressure. Regulators are also investigating the deals of Fed officials but declined to say whether Clarida was investigated.
Clarida's vice chairman term is about to expire on February 1, 2022. The Biden administration has previously nominated Federal Reserve Director Brainard to take over this important position. Obviously, the new escalation of the latest stock trading storm may be destined to put an unperfect end to Clarida's Fed career.
A Fed spokesman said that Clarida no longer intends to attend the Federal Reserve's monetary policy meeting from January 25 to 26 this year.
