Analysis: GameStop saga may provide early test of Biden administration ethics pledges
6 minutes ago (Feb 01, 2021 06:15AM ET)
https://archive.vn/6z58w
https://www.investing.com/news/stock-market-news/analysisgamestop-saga-may-provide-early-test-of-biden-administration-ethics-pledges-2404871
WASHINGTON (Reuters) - Arguably the last thing new U.S. Treasury Secretary Janet Yellen wants to take up during her first days in office is a financial market imbroglio involving one of her last private sector business relationships.
But as hedge fund Citadel LLC emerges as one of the key actors in the trading frenzy last week involving GameStop Corp (NYSE:GME) - and questions arise over whether the activity exposes deeper risks for the financial system - Yellen could find herself pulled into the fray.
Citadel, together with another fund, extended a $2.75 billion financial lifeline to hedge fund Melvin Capital Management, which had suffered heavy losses by betting against GameStop. Citadel also pays for the right to process Robinhood users' trades, a practice that has drawn some concern from investor advocates.
The White House has said Yellen is among a handful of officials monitoring the fracas. As head of the Financial Stability Oversight Council (FSOC), Yellen is broadly responsible for the health of the entire trading and investing system.
A sticking point for her to clear, though, may be $700,000 in speaking fees she accepted from Citadel, as recently as last fall. Yellen has pledged not to involve herself in an official capacity in matters involving the firm without first seeking a written waiver from Treasury ethics officials.
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