By Seth Gellmam
Source: Andrew Harnik/AP
After the major upturn from Gamestop’s erratic share price, many were confused or anxious about where the story would go. One of those people is Janet Yellen, the new Treasury Secretary.
On February 2, the Treasury said that Yellen will call a meeting with the heads of the Securities and Exchange Commission, the Federal Reserve, the Federal Reserve Bank of New York, and the Commodity Future Trading Commission.
Yellen reportedly received the green light from ethics lawyers regarding this meeting. She received clearance to talk on wide ranging financial issues. Her decision to confer with ethics lawyers is because she was paid by one of the hedge funds involved in the saga, Citadel, for speeches she gave.
Yellen received more than $700,000 from Citadel in speaking fees, most recently in the fall.
One ethics lawyer at the Treasury, Brian Sonfield, said that it would be extremely difficult for Yellen to recuse herself from the issue as her role as the Treasury Secretary.
In a statement, Treasury spokeswoman Alexandra LaManna said, “Secretary Yellen believes the integrity of the markets is important and has asked for a discussion of recent volatility in financial markets and whether recent activities are consistent with investor protection and fair and efficient markets.”
The volatility of Gamestop’s share price has been evident over the last month, as many users on the forum WallStreetBets on Reddit bought shares. The price fluctuated rapidly, on some occasions jumping and dropping by hundreds of dollars in the same day. Some other stocks that dramatically fluctuated were cinema chain AMC and headphone maker Koss.
Last week, the SEC warned investors that the extreme volatility in the stock price was dangerous for investors and may result in large losses.
This meeting will likely result in a regulatory review of the role of non-bank firms in the financial markets, according to some experts.