Despite an $810,000 conflict of interest, newly confirmed Treasury Secretary Janet Yellen will not recuse herself from advising President Joe Biden on the ongoing hedge fund mania with Robinhood and GameStop.
When asked during a Thursday White House press conference whether Yellen would recuse herself from advising the president on the ongoing $GME stock shorting after having been previously paid upwards of $1 million in speaking fees from Robinhood’s largest customer, Press Secretary Jen Psaki didn’t seem to have a problem with relying on the new Democratic Treasury secretary’s counsel.
“Separate from the GameStop issue, the secretary of the Treasury is one of the world-renowned experts on markets, on the economy. It shouldn’t be a surprise to anyone she was paid to give her perspective and advice before she came into office,” Psaki told reporters, ignoring the obvious conflict of interest.
Psaki also seemed to imply it was sexist to mention Yellen’s conflict of interest because she’s a woman.
“I’m also happy to repeat that we have the first female treasury secretary,” Psaki said in opening her response to the question from a reporter, going on to say Yellen’s communications team would typically take those questions instead of her.
Citadel LLC, one of the hedge funds that along with Point72 Asset Management invested $2.75 billion to bail out Melvin Capital, one of the main Wall Street losers in the Gamestop snafu, paid Yellen a total of $810,000 in speaking fees in 2019 and 2020. In fact, Yellen’s financial disclosures reveal the new secretary has been paid $7 million in speaking fees from financial firms over just the past two years, raising questions about her loyalties to Wall Street.
Yellen’s conflicts of interest are of particular importance in light of the recent stock market frenzy in which a group of Redditors decided to beat Wall Street financiers at their own game. When a hedge fund shorted GameStop, borrowing the stock and then selling it, thinking it could buy it back at a lower price and return it for a profit, the Redditors decided to buy oodles of shares, bidding up the price and not selling it, forcing the hedge fund to pay borrowing costs until it gave back the shares, which it could no longer acquire at the price it needed to return them for gain or to break even.
After the price of GameStop shares went through the roof, Robinhood, a popular trading platform, began banning users from trading $GME securities. Robinhood also has incredibly close financial ties to Citadel. According to June 2020 data from the Financial Times, “Robinhood’s revenues from equities and options order flow came to $91m for the period, with $39m from Citadel Securities.”
To make matters worse, when Robinhood’s defensive move for Wall Street drew criticism, Big Tech stepped in to help, with Google reportedly deleting more than 100,000 negative reviews of Robinhood’s app on its store, just the latest move by the tech oligarchs to save corporate giants at the expense of powerless Americans with nothing more than a Reddit account and a few bucks.
Now Yellen is refusing to recuse herself from advising the president on the entire GameStop-Robinhood-Citadel-Melvin Capital ordeal despite her own financial entanglements and lucrative past with Wall Street bigs.