(Adds details on market volatility, ethics memo)
WASHINGTON, Feb 2 (Reuters) – US Treasury Secretary Janet Yellen is calling a meeting of top financial regulators this week to discuss market volatility driven by retail trading in GametopTop Corp and other stocks.
Yellen said on Tuesday that a Treasury official would call the heads of the Securities and Exchange Commission, the Federal Reserve, the Federal Reserve Bank of New York and the Commodity Futures Trading Commission.
According to a document seen by RaeLynn, and to engage on broader issues in the financial services industry, Yellen sought and obtained permission from ethics lawyers before calling the meeting.
Following Yellen’s decision to seek amnesty, Reuters made a report here that speaking fees were paid to her by a major player in the Gametoptop saga, the hedge fund Citadel LLC, giving her an ethics apology to deal with matters May be required. strong.
Treasury officials, who declined to be identified by name, said the meeting would be held this week, possibly as early as Thursday.
Treasury spokesman Alexandra Lamanna said in a Reuters statement, “Secretary Yellen believes the integrity of the markets is important and has discussed the recent volatility in financial markets and whether recent activities include investor safety and fair and efficient markets. Correspond to. “
Yellen’s action comes after Geleen’s days in recent weeks in shares of video-game retailer Gametop, run by retail investors making or losing billions of dollars to hedge funds and other investors. Retail trading activity has also raised silver prices in recent times.
GameStop shares rose more than half the price on Tuesday and silver prices retreated to a reddit-driven trading frenzy that had been dead at least until now in the stock and commodity markets.
GameStop shares closed down 60% at $ 90. They are now worth less than a fifth of their previous week’s high of $ 483.
Regulatory experts say the saga is likely to accelerate regulatory review of the larger role played by non-bank firms in financial markets.
Treasury ethics attorneys have given Yellen the flexibility to work on any related issues with no limitations in the current or future markets, the Treasury official said.
In a memorandum allowing Yellen to call a meeting of regulators, an official of Treasury Ethics, Brian Sonfield said, it would be “difficult, if not impossible” for Yellen to distance herself from matters involving market volatility.
“You are the Secretary of the Treasury, the duties that require you to be involved in a wide array of matters focusing on these areas,” Sonfield wrote.
“Issues related to these areas can arise at any time without consultation with the ethics office. If you move away from matters related to these areas and argue in favor of priority, then these situations are difficult, if not impossible. “
Reporting by David Lauder and Trevor Hunnicutt; Additional reporting by Andrea Schaal; Editing by Heather Timmons, Cynthia Osterman and Peter Connie