(Add details on market volatility, ethical memorandum)
WASHINGTON, Feb. 2 (Reuters) – U.S. Treasury Secretary Janet Yellen is calling a meeting this week of the best financial regulators to drive market volatility through retailing in GameStop Corp and other stocks.
Yellen will convene the heads of the Securities and Exchange Commission, the Federal Reserve, the Federal Reserve Bank of New York and the Commodity Futures Trading Commission, a Treasury official said Tuesday.
According to a document seen by Reuters, Yellen sought and received permission from ethics advocates before convening the meeting and involving various issues in the financial services industry.
Yellen’s decision to ask for the waiver follows a Reuters report that she had to be paid by a key player in the GameStop saga, the hedge fund Citadel LLC, for asking for an ethical waiver to do business. handle what the firm.
The treasury official, who did not want to be identified by name, said the meeting would be held this week, possibly as early as Thursday.
“Secretary Yellen believes market integrity is important and called for a discussion of recent financial market volatility and whether recent activity is in line with investor protection and equitable and efficient markets,” Treasury spokeswoman Alexandra LaManna said in a statement. told Reuters.
Yellen’s action comes after days of gyrations in the shares of video game retailer GameStop, driven by retail investors who have earned billions of dollars for hedge funds and other investors in recent weeks. Retail activity has also increased the price of silver over the past few days.
GameStop shares more than halved in value on Tuesday and silver prices retreated when the Reddit-driven trading frenzy that caused the stock market and commodity markets to decline, at least for now.
GameStop shares closed 60% at $ 90. They are less than a fifth of their $ 483 high last week.
The saga is likely to accelerate a review of the regulatory acceleration of the growing role that non-banking firms play in financial markets, according to regulatory experts.
The ethics treasury attorneys have given Yellen flexibility to work on any related issues that arise, without any restriction on current or future markets, the treasury official said.
In the memorandum authorizing Yellen to convene the meeting of regulators, Treasury ethics official Brian Sonfield said it was ‘difficult, if not impossible’ for Yellen to withdraw from market volatility issues.
“You are the secretary of the treasury, and the duties require you to be involved in a wide range of matters directed at these sectors,” Sonfield wrote.
‘Issues concerning these sectors can arise at any time without the opportunity for consultation with the ethics office. These circumstances make it difficult, if not impossible, for you to exempt yourself from matters concerning these sectors and also plead for prior permission.
Reporting by David Lawder and Trevor Hunnicutt; Additional reporting by Andrea Shalal; Edited by Heather Timmons, Cynthia Osterman and Peter Cooney