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Yellen Summons Regulators to Discuss Financial Market Volatility

386 points by disgrunt 6y ago

koolba 6y ago
For additional context, the most recent payments for speaking fees from Citadel were barely three months ago[1]: > The Chicago-based hedge fund paid Yellen $292,500 for a speech on Oct. 17, 2019, $180,000 for one on Dec. 3, 2019, and $337,500 to speak at a series of webinars held from Oct. 9-27, 2020. [1]: https://dailycaller.com/2021/01/28/janet-yellen-gamestop-citadel/ https://dailycaller.com/2021/01/28/janet-yellen-gamestop-cit...
- mrits 6y ago
  must be an amazing speaker
  - Mizza 6y ago
    Speaker fees are a way of laundering bribes, plain and simple. Watch the docu on OxyCotin. Doctors who made the most in sales for the Sacklers got paid hundreds of thousands to give lectures.. that literally nobody attended. They all kept giving the lectures, time after time.
    - this_user 6y ago
      Pretty pointless to bribe someone who was a private citizen at that point, and who had no reasonably expectation of ever holding public office again.
      - lazide 6y ago
        And yet, not only became a public office holder after, but a key one overseeing and influencing the industry giving her the nominal 'bribe'?
        this_user 6y ago
        Which was in no shape or form foreseeable at the time. They might as well have given that money to a random person on the street in the expectation that they might be put in charge of the SEC.
        Mizza 6y ago
        This is an absurd opinion. There was a very short list and her name was at the top.
      - qznc 6y ago
        If you have a solid reputation, the promise of speaker fees is enough of a bribe. "A Lannister always pays his debts."
    - throwaway5752 6y ago
      Just basic logical fallacy that "some people are bribed this way, ergo, she was bribed this way". This is a matter of public record, and she was made $7M in speaking fees in the past two years. It is a small percentage of her income, and not worth more a small fraction the future value of her reputation. The idea Yellen - one of just three living Fed chairs and one of the most influential figures in economics - would do political favors for $300k is honestly ridiculous. I have asked it elsewhere, but if you want to prevent this, you are making it illegal or disqualifying. I would personally like to know where the line would be drawn for public service. It seems like having an employment relationship would be far more influencing than a speaking engagement. It is important to emphasize this speech is disclosed and public knowledge.
      - Mizza 6y ago
        Bribery doesn't have to work the way you imagine it, sacks full of cash being exchanged in a dark parking garage in exchange for vote. It's just a reminder - when it comes to time make that big decision, hey, remember who your friends are. I of course think it should be both illegal and disqualifying. The line is very clear - reception or accepting the promise of large sums of money should be disqualifying for positions of high office. Simple as.
mensetmanusman 6y ago
Oligarchs have power.
DamnYuppie 6y ago
The most upsetting part about this is that it is completely expected that a politician will strive to do what is in their best interest and the interest of their supporters. Please note it doesn't matter what party you support politicians are generally all the same in that they use their positions to seek power and wealth from their positions at the expense of their constituents.
GizmoSwan 6y ago
Now that this is open information, they may have wasted all that cash. Let see what happens.
ordinaryradical 6y ago
Regulatory capture is a gigantic problem, especially in finance. It’s obvious that we don’t have the right incentive structure with the SEC, either. If you can make 20x more using the skills you’d need to investigate companies trading instead, the talent pool is reduced to those motivated by power/ideology. I’ve always thought financial regulators should have some kind of incentive structure that closes this gap but it’s not clear how to do that without skewing the enforcement priorities.
- MattGaiser 6y ago
  Or making some "government efficiency" watchdog group scream in anger. If Yellen were mostly interested in money, she has already chaired the Federal Reserve. 700K is a pittance compared to the millions she would earn in the private sector. Yet people begrudge her the 220K she does earn. Treasury Secretary and Chair of the Fed would be a multi million dollar a year jobs in the private sector.
  - siscia 6y ago
    Not sure I get your point? 700k might be a small sum (I don't think it is, but ok) for her, but she still accepted it.
    - junipertea 6y ago
      The point was it’s not a small sum for her, it’s in fact more than triple her yearly salary. An adjacent point was she makes little compared to how much she could be getting, and people still complain. Her taking up that offer is no surprise.
      - deleted 6y ago
        [deleted]
      - MattGaiser 6y ago
        ^He got my point right
    - 6y ago
alexfromapex 6y ago
Which agency is responsible for investigating this conflict of interest?
- willcipriano 6y ago
  I think the FBI but they got yelled at in the 70s[0] for doing that sort of work and given new guidelines to prevent it[1] and apparently haven't done much like it since. [0]https://en.m.wikipedia.org/wiki/Abscam https://en.m.wikipedia.org/wiki/Abscam [1]https://oig.justice.gov/sites/default/files/archive/special/0509/chapter2.htm https://oig.justice.gov/sites/default/files/archive/special/...
  - adolph 6y ago
    This wasn't quite the same but had fallout for some elected officials: https://en.wikipedia.org/wiki/Jack_Abramoff https://en.wikipedia.org/wiki/Jack_Abramoff Back in the news last June: https://www.courthousenews.com/lobbyist-abramoff-charged-in-cryptocurrency-case/ https://www.courthousenews.com/lobbyist-abramoff-charged-in-...
  - buescher 6y ago
    Note that Abscam is evidence that it only takes about $50K in 1978 dollars (which would be about $200K today) to bribe a corruptable U.S. congressman.
yowlingcat 6y ago
Complex systems favor the wealthy.
- trollski 6y ago
  and bullshitters
sky_rw 6y ago
I don’t see any real pressure for her to recuse herself. The dominant political party in the USA ran on the simultaneous platforms of “the swamp is fake” and “the swamp is better than the alternative”. Well this is the swamp the populists were talking about. The democrats are now are emboldened with a clear mandate from the people that these relationships are an acceptable price to pay.
- skinnymuch 6y ago
  Whichever populists you’re talking about went along with the swamp being just as swampy as ever, if not more so during Trump’s tenure. Trump, Fox, and establishment Republicans all directly or indirectly said “the swamp is better than the alternatives”. See, for example, many of the excuses given for hiring all the 9 figure and up net worth cabinet members.
- deleted 6y ago
  [deleted]
- wycy 6y ago
  If only we could all get on the same page about this as a society. The previous administration ran the single swampiest administration in American history. The current administration is dramatically less swampy, but still as swampy as a typical administration. This is something that absolutely needs to be fixed in our society, and something that should unify 99% of people. But half of the country is under the delusion that the previous administration was somehow fixing this, simply because they said they were. This division makes it impossible to ever get anything done.
person_of_color 6y ago
Can an insider explain the shenanigans behind this? The speech is surely not worth that much. Is the exorbitant amount of money paid for the speech just an opportunity to be a patron of a "thought leader", i.e a legal bribe in other words?
- runako 6y ago
  Her speech is surely not worth that much to you. $700k is not a material amount of money for Citadel, especially if it may contain information that can give them an edge.
  - jariel 6y ago
    It's a material amount that can only be spent in the context of 'getting something for it'. What that is is nebulous, and it could be something as simple as an introduction to someone as of yet unknown at a future date. But it's something worth $700K, not a 'speech'.
    - bidirectional 6y ago
      700k on several events that their employees will get excited for and can brag about to their (fellow finance professional) friends seems reasonable.
      - jariel 6y ago
        Yes, but also, when the next business cycle market crash happens, and the plebes are screaming about hedge funds, Citadel can also pick up the phone and call their 'friend' Janet Yellen, to introduce them to the Sec. Treasury, and that Senator who's putting putting up a huff about some new legislation. If you hire U2 to do a a private show for your staff, you don't get those kinds of added bonuses.
        camel_Snake 6y ago
        Citadel is large enough I think she'd be obligated to pick up the phone regardless.
runako 6y ago
I've seen this a couple of times and I don't understand the outrage. Yellen is a financial professional. Would we expect her to a) not speak at Citadel if asked or b) request less than market rates for doing so? I really don't understand what people want from her.
- AnimalMuppet 6y ago
  We want (expect) her not to sit in judgment of the hand that feeds her.
  - runako 6y ago
    > feeds Oh, if she's still receiving money from Citadel, I agree. If she's not still receiving money from Citadel, I don't see the relevance. I would expect anyone qualified for the job to have made paid speeches at any number of important financial institutions over the years. It wouldn't be in our best interests as citizens to have them recuse every time a matter concerning one of them arises.
    - nojokes 6y ago
      Yes, it would. It would eliminate clear conflict of interests.
    - defen 6y ago
      If Yellen had been appointed a judge instead of Secretary of the Treasury, and a court case involving Citadel came before her, would you expect her to recuse?
      - runako 6y ago
        I don't think giving a few speeches is worthy of recusal, no. Unless people are alleging that she entwined with them in some material way (e.g. consulting, advisory, etc.) then I honestly don't see the problem. The party who could have a problem is Citadel, who might be at risk for finding out that she gave the same speech for less money to a nonprofit.
addicted 6y ago
Is Citadel accused of doing something illegal?
- disgrunt 6y ago
  Doesn't matter. Yellen has a conflict of interest.
- notahacker 6y ago
  By Redditors who have wasted money following investment advice from other Redditors, yes. Specifically it's claimed that after Citadel gave a failing hedge fund lots of money to exit their position, the hedge fund lied about exiting its position and actually didn't start exiting its position until a different division of Citadel asked Robinhood to stop GME buys the following day. Focus on Yellen's speaking fee is simply trying to explain away in advance why many people given access to data which could prove it either way and tasked with investigating will conclude this baseless conspiracy theory is a baseless conspiracy theory.
- vorpalhex 6y ago
  Yes, several retail investors have accused them of acting illegally to protect their emergency loan to Melvin capital by raising their collateral fees for certain stock transactions, resulting in restrictions on GME buys. Citadel effectively has a conflict of interest in letting GME buys occur, and it was after they had that conflict that GME buys became restricted.
sgpl 6y ago
Unfortunately this is more the norm than the exception. On a tangent, something similar happened with a Canadian Charity called WE [1] and them being chosen to run a billion dollar grant program for Canadian students during covid. It later came out that the charity had paid speaking/appearance fees to the PM's family as well as to the finance minister at the time. After enough outcry from the media + opposition + people, the finance minister resigned and WE was stripped of the contract. [1] https://en.wikipedia.org/wiki/WE_Charity_scandal https://en.wikipedia.org/wiki/WE_Charity_scandal
- monkeybutton 6y ago
  Would it be wrong to characterize the WE charity as a "self licking ice cream cone"?
jariel 6y ago
'Speaking Fees' are absolutely the new form of fraud/bribery/kickback. It's the most arbitrarily thing imaginable, and you can just throw up any number for 'services performed'. After Obama completed his term, he was immediately on the 'Speaking Fee' tour, including several million paid by a group of Italian banks in desperation [1], totally insolvent - for a a 45 minute speech (!). I wonder if what they needed was a 'Pep Talk' from a 'Former President' ... or perhaps someone influential to put in a good word with the ECB to push for loser monetary policy that might help save failing Italian banks? I don't think speaking fees imply some kind of bad behaviour, but they are definitely smoke and often represent a conflict of interest. It's a little bit funny that people don't recognize this: $700K (or whatever large amount), this is a material amount of money, you don't just spend this for no reason, you 'get something' for it. As Hillary Clinton was about to win the 2016 presidency, masses of cash flowed into the Clinton Foundation (Norway and Australia were pumping in 10's of millions) but just as she lost - 'charitable donations' dried up. Have a look at this chart [2]. Just stare at this chart for a minute: massive cash flows to the charity someone expecting to be the most powerful person in the world, and then those cash flows completely evaporate as soon as we found it she wasn't going to have that power? So, did Norway, Australia and all these international agencies and governments magically decided to be 'less charitable' in 2016? Or was it that they were 'expecting to get something in return' for their massive charitable donations? Let's not be naive. It doesn't mean there is criminality or even excessive payments, but it's obviously a conflict of interest. If may be something as simple as 'The Norwegian Sovereign Wealth Fund wants 10 Minutes with the President, to get an introduction to some agency' - and that's it. A very expensive call, but possibly worth it. And this is not 'political' and certainly not 'one side of the aisle' it's just business. [1] https://www.express.co.uk/news/world/802063/Barack-Obama-speech-Global-Food-Innovation-Summit-Milan-private-speech-Wall-Street https://www.express.co.uk/news/world/802063/Barack-Obama-spe... [2] https://www.opensecrets.org/news/2018/12/clinton-foundation-revenue-low/ https://www.opensecrets.org/news/2018/12/clinton-foundation-...
NDizzle 6y ago
Imagine the media response if this was a Trump appointee. Imagine the billions in property damage due to peaceful protests if a Trump appointee didn't recuse themselves.
- deepakhj 6y ago
  I think Trump raised 300 million for stop the steal and didn't spend a dime on it. It all went to himself personally.
  - TopInvestor 6y ago
    GOP , not Trump
vsskanth 6y ago
are there different ethics rules for "speaking fee" vs "consulting fee" ?
- disgrunt 6y ago
  The problem is not so much the speaking fee as she is now presiding over a meeting with regulators on a matter directly related to Citadel.
jb775 6y ago
"Speaking Fee" is the modern day term for bribe.
- camel_Snake 6y ago
  I think it's more of an expensive way to bring some cachet to your organization. Do you think every college graduation speaker is just being bribed?
  - jb775 6y ago
    I think colleges do it for cachet, but finance companies do it for ROI. Think about the business models...The college business model depends on maintaining prestige to continuously attract applicants willing to pay high admission rates. The finance business model uses money to make more money, and the risk to reward ration can be swayed depending on decisions made by certain individuals.
syops 6y ago
Speaking fees is how one legally bribes politicians. Such is how my cynical self sees it. The Clintons earned over $150 in speaking fees since leaving the presidency. Does anyone think their speeches are worth $10 million a year? At the end of the Clinton presidency he signed into law a repeal of Glass-Steagall. Reagan famously was paid around $10 million after his presidency to give some speeches in Japan. He got rid of car import quotas. Perhaps I'm being too conspiratorial or cynical but it seems to me that this is the polite understanding between business and those with political power. We'll pay you a lot of money for very little work if you pass legislation that we like. https://www.cnn.com/2016/02/05/politics/hillary-clinton-bill-clinton-paid-speeches/index.html https://www.cnn.com/2016/02/05/politics/hillary-clinton-bill...
- sixQuarks 6y ago
  I can’t believe you’re even questioning yourself on this. OF COURSE it’s legal bribing.
  - boston_clone 6y ago
    even in situations when you feel you may know all the facts, it's still healthy to doubt your conclusions!
    - sixQuarks 6y ago
      I don't claim to know all the facts, but at some point you have to stop being naive. It's obvious these companies expect some sort of political benefit for paying these outrageous speaking fees, the part we don't know is to what extent there is an "agreement". I will concede the agreements may not be communicated in any way, and just based on expectations. However, these fees would not continue to be paid if expectations did not continue to be mostly met.
- sdflhasjd 6y ago
  > over $150 in speaking fees I suppose that's technically true
psychlops 6y ago
If she finds for them, it's because they paid her. If she finds against them, it's because they didn't pay her enough. Seems like a great impartial position.
pradn 6y ago
The more absurd thing is criticism of Yellen on this part is being defended - by the White House press secretary no less - as a woman's right to use her skills to make money. Yes, women should absolutely be able to rise to their talent and ambition, but it's a clear conflict of interest for government official. It's a disingenuous use of the most vacuous forms of language to defend open corruption. But then again, if we wanted finance experts to chair the Fed and be the treasury secretary without any prior monetary relationships with banks and hedge funds, we would probably have just some academics. A lot of academics in economics/finance get paid for legal testimony on behalf of companies and such, too.
- gedy 6y ago
  I think this highlights an important blind spot some people have when they focus on identity politics. A huge gap between elites and the rest of society is somehow more okay if the elites are more diverse in gender or skin color. I don't feel it's much better but am at risk of being told I don't care about diversity or intentionally changing the subject.
  - meowface 6y ago
    I have no problem with elites, personally. Just (alleged) corruption. I think most social justice advocates would agree that corruption and regulatory capture are bad. If anything, I'd expect a response more like "why are women like Yellen and Hillary Clinton being uniquely targeted with these accusations?" (whether they are or aren't). I'm not sure where the parent poster is sourcing the claimed identity-based defenses of her alleged corruption, though.
  - bsanr2 6y ago
    I think you'll find that most people who focus on identity politics would rather have that gap closed for everyone, than to see specifically people who look like them in places of power why they themselves continue to languish. The issue is that these people who focus on identity politics aren't actually stupid and, in fact, do understand the rules of this game that they were swept into (without their consent, mind you): power accrues more power and tribalism is rampant. Under the status quo, people who've been marginalized in the past have a better chance when they increase their numbers in seats of power. Further, strides forward in economic and social wellbeing tend to leave them behind unless they speak up. So the dilemma in the situation you describe is between whether to ignore diversity concerns and in turn be ignored, or to speak up and risk losing class solidarity. It sucks that we have to make that decision; it would be better if less-marginalized people made proactive efforts to ensure we're involved in and will explicitly benefit from initiatives or movements that implicitly aligns with our interests.
trentnix 6y ago
Of course she won't recuse herself. That wouldn't benefit Citadel at all. And they paid her expecting benefits.
- nojito 6y ago
  If she doesn’t recuse there’s no hearing into robinhood at all.
trollski 6y ago
its the same as asking a prostitute to play a main role in a short porn movie in which you’re the second actor. totally legit and you ahould see the face if you ran into undercover operator on the orher end.
sub7 6y ago
Guys hate to be the one saying this, but $700k for speaking fees at this level is really not that much money and certainly not enough to influence someone who thinks in 4 commas. If Citadel accounted for 70% of all her speaking fees, that would warrant a closer look - this is a move along carry on for me.
- ABeeSea 6y ago
  Yea I’m surprised how quickly HN is jumping on the conspiracy train. This was an expensive employee perk; not a “legal bribe.”
  - colinmhayes 6y ago
    I think it's more about the message this sends than actually thinking there's corruption. We just spent 4 years having our institutions especially those related to corruption torn down by the president. Now seems like a great time to ensure proper procedures are followed, even if they're a bit excessive.
- WORMS_EAT_WORMS 6y ago
  You're not wrong at all. But, I think the outrage here is a bit more general. Buying speeches is essentially influence tokens. Any amount and the idea it's happening for personal gain of a government official in America is what frustrates people. It kind of reads as if you're saying 'eh, it's not really that many influence tokens'. For example, if this amount is a "move along, carry on" for you, I'd be curious to know when you draw the line specifically?
- throwaway5752 6y ago
  It's just more appealing to believe in conspiracy theories and that the world is against you. Wait until these same people find out about various "senior advisors", board memberships, and think tanks! This isn't ideal but public service isn't a vow of poverty and someone will pay them. What is important (and appears to be the case here) is that they are public and disclosed. Citadel is only 10% of her overall speaking fees over two years. She owes them nothing.
vmchale 6y ago
I don't think citadel did anything shady here, seems like people misunderstanding things to get mad.
citilife 6y ago
Let's not forget, government regularly hands out massive amounts of money to private enterprise -- https://www.bloomberg.com/news/articles/2020-03-24/fed-hires-blackrock-for-agency-cmbs-corporate-debt-programs https://www.bloomberg.com/news/articles/2020-03-24/fed-hires... The "speaking" fees are really just bribes, lets me honest about it. It's so corrupt and so obvious and begs the question what are you going to do about it?
slt2021 6y ago
Citadel hedge fund (not the market maker) has a large short bet on GameStop and profits from short selling https://wallstreetonparade.com/2021/02/citadel-didnt-just-bail-out-a-gamestop-short-seller-citadel-also-had-a-big-short-position-in-gamestop/ https://wallstreetonparade.com/2021/02/citadel-didnt-just-ba...
- gruez 6y ago
  ...according to a SEC filing in september 2020. Not exactly the up to date information.
  - slt2021 6y ago
    their bets are long-term. same date 13F filing for Melvin Cap show short bet against GameStop as well, so we can safely assume they are on the same short side together. why would Citadel bail out melvin ?
    - gruez 6y ago
      >why would Citadel bail out melvin ? Same reason why people buy stocks when it's tanking (remember, for every seller there's a buyer): because they think the fund's undervalued and they can buy it at a discount.
j0ba 6y ago
You guys don't get it. Biden is restoring the soul of America - exactly how he sees it.
cbradford 6y ago
Whether or not she should have accepted the fees is not relevant, the point is she should recuse herself from any investigation into companies that she has a personal business relationship with. That is basic ethics. What is the reason she should not recuse herself?
- dcolkitt 6y ago
  Citadel is not being investigated. Citadel had nothing to do with the Gamestop meme mania, besides being a market maker that processed a lot of transactions. Anything else you hear is crackpot conspiracy theories with zero evidence. It'd be like saying "Why is this official with ties to Toyota not recusing themselves, when we already know that the mafia regularly drove cars! How deep does this go?!"
  - cbradford 6y ago
    What are we investigating here? If we are investigating the market structure of equities and how that effected the shut down of trading to a specific class of investors, individuals, and not others, institutions, then absolutely Citadel is a major part of that. The are the primary PFOF market maker, and the #1 counterparty to Robinhood. Not saying that did happen, not saying it didn't, but Citadel is central to any conversation around equity market structure. When is it so vital that Yellen, who is an economist and former Fed official and not an expert at all in equity market structure, so vital to be involved in this investigation? What expertise does she have to no one on the SEC staff has?
    - dcolkitt 6y ago
      > If we are investigating the market structure Market structure is not the subject of the investigation. Market volatility is. In this case microstructure has absolutely zero to do with the volatility. It was caused by 7 million retail traders simultaneously joining a poorly thought out pump and dump. That would create volatility regardless of the mechanics of how orders are crossed. > Not saying that did happen, not saying it didn't, but Citadel is central Spoiler: It didn't happen. Robinhood already publicly confirmed that the issue was them running out of collateral at the clearinghouse. Citadel confirmed that it never stopped accepting orders. The DTC confirmed that it raised the margin on GME, causing Robinhood to near its margin calls. JP Morgan and Goldman confirmed that Robinhood drew down its credit lines. Dozens of other brokers, most without ties to Citadel, restricted trading at the same time citing the same clearinghouse issues. The SEC could easily verify all of this. It would necessitate a giant conspiracy involving hundreds of potential whistle-blowers across a dozen companies all risking jail time. And somehow there's zero evidence of any of it. This has become the stock market equivalent of QAnon at this point.
DaniloDias 6y ago
Why anyone has any faith or belief in our coruptacracy is beyond me.
tunesmith 6y ago
I'm pretty astonished at the level of certainty going on here that this was corrupt. Isn't spouting off on that the easy path? Can it at least be accepted that it is possible to accept speaking fees without engaging in a quid pro quo for later favors? Given that, shouldn't there be a hint of evidence that there is some sort of actual agreement or plans to do a bribed action, aside from the speech and speaking fees themselves?
- jaywalk 6y ago
  It's probably corrupt. But even if it's not, people recuse themselves for far less all the time. The fact that she is refusing to do so is, quite honestly, disgusting.
- philosopher1234 6y ago
  Why are Janet yellens (or really anyone’s) speeches worth 700k? What could she possibly teach citadel employees in that short time that could generate so much value?
- threwawasy1228 6y ago
  No, it is so highly improbable that someone would receive the equivalent of a years tech salary in SV for a handful of speeches that the act itself is immediately suspect. If we required the kind of evidence that you are talking about no bribery cases would ever be put forward. Also, what you are asking for is NOT required by law to bring forward such a case legally speaking. You aren't required to have a smoking gun.
the_solenoid 6y ago
One chance to prove you are not bought. I don't have much hope but this is a big enough test early enough.
deleted 6y ago
[deleted]
jswizzy 6y ago
CNN just ran a story about Biden separating kids from their parents at the border and putting them in cages
morpheos137 6y ago
There should absolutely be a cap on "speaking" fees a current or former Government official should be able to receive. It is absolutely institutionalised corruption or post facto bribery.
- lovecg 6y ago
  Life finds a way. If not speaking fees it would be book royalties or any number of other schemes. Maybe we can have severely increased taxes beyond certain point on government officials?
balozi 6y ago
You have to wonder, why would the hedgies pay her that kind of money for speaking engagements while she was still a civilian? Did they foresee that she would be their regulator in the near future?
f430 6y ago
The whole hedge fund colluding conspiracy has been debunked [1] RH and Citadel weren't colluding at all. It was their clearing house (Apex, which is used by almost 50% of brokerage firms) that demanded they raise the collateral by 100% which in turn required the brokers to stop transferring shares as the clearing house were not comfortable with floating large number of shares with limited quantity and high volume. I'm afraid that because WSB has politicized this to "David vs Goliath" without even considering that a small group of their users ARE the real Goliaths, hyping and mobilizing their userbase incapable of critical thinking to drive share prices up and down. Now they are simply going to make life more difficult for retail traders and we are going to see new regulations against using social media to pump up stocks. I hope that those people who were pumping up $GME, saying it was going to $30,000 have been using Tor or VPN. The conspiracies coming out of WSB has been nothing short of Qanon-like in terms of its vigor, fixation and paranoia. It feels exactly like what r/the_donald was in 2016 before they were rightfully shut down. [1] - https://news.ycombinator.com/item?id=26016048 https://news.ycombinator.com/item?id=26016048
fallingknife 6y ago
We are compensating high office holders all wrong. We are paying them pennies on what they could make in the private sector for a similar position of power, and leaving them to make up the difference by extracting money from favors and prestige. It virtually guarantees corruption. They should be paid an enormous salary plus an excellent pension for life, with the caveat that they are not allowed to accept income from any other source for the rest of their life. This would not be a lot of money. If we paid everyone in the house, senate, and cabinet $10M / y, that would cost < $5B per year, which is nothing to the government. You could make the pensions like $2M / year, and the total cost would probably come in at < $10B.
- lovecg 6y ago
  I agree except for the prohibition on other sources of income. I do want some of these people to write memoirs for example. The exact amount is something that needs careful consideration as well, more is not always better. At $10M a year you’ll end up with a “rest-and-vest” congress full of checked out do-nothings (granted some people prefer that).
PaulHoule 6y ago
I wrote her a letter (paper) asking her to withdraw her ethics waiver. Who grants this waiver? Can I write to somebody who can prevent her from getting it.
jinkyu 6y ago
well at least Biden doesn't make any mean tweets
JoshTko 6y ago
It seems that the biggest underling issue is that people are at key junctures to make decisions for groups. We have the technology to directly vote, we should change out Govt to more freely allow for that.
sanguy 6y ago
We all moaned and sighed and called Trump and family a bunch of grifters. Now we get Biden and his administration of professional grifters. It should shock us all it costs 1.9T for a country with 330 million peopled to give 150 million of those $2000. That means 1.6T in grift going down.....
- deleted 6y ago
  [deleted]
orange_tee 6y ago
On the one hand $700k is more than a lifetime of savings for many. On the other hand I sometimes get surprised by how cheap the most influential politicians in the world are. I guess this sort of thing is regular enough so it adds up?!
noisy_boy 6y ago
The amount of mental jugglery in the comments in amusing. It is as if it is physically impossible and greatly naive to expect/have a person with great integrity in their financial/ethical conduct for public office while that is the very criteria that is tooted from the roof-tops whenever public office is concerned.
josefresco 6y ago
How much did Mnuchin's vacations cost taxpayers? Oh yeah ... more. "In the report, the OIG reviewed nine travel requests by Mnuchin for military air transportation since March 2017, of which seven were approved and taken, one was withdrawn, and one was approved with travel pending in late October 2017.[110] The total cost of the seven trips taken was $811,800, calculated from per-hour cost and operating hours for the specific aircraft, or Air Force-provided direct costs of operations." And this was MY money he torched, not wallstreet And this was just ONE of the shady things he did while serving. I'll take Yellen 7 days out of the week if the alternative are ghouls like Mnuchin.
kristjansson 6y ago
Speaking fees turn prestige into money, and money into prestige. People that are more famous than rich get a little richer; institutions get to associate themselves with those people, and be the kind of place where you might see those people. A simple transaction, if a bit grubby for injecting money into social capital relations. That all seems fine! Most speaking fee arrangements - even with politicians - seem to me to be in this mode. Are there cases where kickbacks or bribes are given as speaking fees? Sure, elsewhere in this thread there's discussion of no-name doctors (who happened to prescribe lots of Oxycontin) giving lectures to empty halls for hundreds of thousands of dollars seems like a bribe. But that's because the no-name MD is getting _way_ more than the going rate for his status! When the speaker is already well known, the institution is already getting something for its money, so overlaying an implication of clandestine, speculative (retroactive?) quid pro quo is an unnecessary over-read. Also, like, Barney Frank is on the board of a bank. Chris Dodd asks 40-70k to speak. Mike Oxley worked for NASDAQ. These 'sinecures' don't seem like they're conditional on passing laws that Wall St. likes.
dang 6y ago
The submitted title was "Yellen Accepted $700K Speaking Fees from Citadel; Will Not Recuse from Hearing". That broke the site guidelines, which ask: "Please use the original title, unless it is misleading or linkbait; don't editorialize." Cherry-picking a detail and making that the title instead is the primary form of editorializing, so please don't do that. Titles are by far the biggest influence on threads. On HN, submitting an article doesn't confer any special right to frame the content for everyone else. If you want to say what you think is important about an article, that's fine, but do it by adding a comment to the thread. Then your view is on a level playing field with everyone else's. https://hn.algolia.com/?dateRange=all&page=0&prefix=false&sort=byDate&type=comment&query=%22level%20playing%20field%22%20by:dang https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so...
- disgrunt 6y ago
  The Bloomberg title is the misleading one if you read the article. The heart of the article covers Yellen's ethical issues, but for whatever reason Bloomberg chose the most benign title possible. I thought it was in HN's interest to not have the lead buried. I suggest HN have exceptions to this editorialization rule in cases like this.
  - dang 6y ago
    Yes—that's a fair point. It comes up a lot in the slightly (but not entirely) different context of press releases: https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sort=byDate&type=comment&query=corporate%20press%20release%20by:dang https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor..., which are a lede-burying genre par excellence. The current article is arguably a borderline case, but it takes a long time to get to the ethics issue and I'm not sure that's what the bulk of it is about. Maybe it should be, but that's more of an editorial point.
kaesar14 6y ago
I find my problem with people defending figures like Yellen accepting speaking money is that they will often put forward the most charitable explanation of this behavior. "She's an accomplished woman who held one of the most powerful positions in global financial regulation! Of course big banks and hedge funds want her to come and speak." Why should we give our public officials the benefit of the doubt? Why should they get the charitable viewpoint? Imo, if you hold the absolutely shocking amounts of power someone like Yellen does, where your post has significant control on the oversight and regulation of the most powerful free market economy in history, you NEED to have your feet held to the fire with regards to stuff like bribery. Our system has become corrupted due to charitable explanations.
rudedogg 6y ago
FYI, previous title on HN was "Yellen Accepted $700K Speaking Fees from Citadel; Will Not Recuse from Hearing". That's why it's the main topic in the comments. > "Yellen received more than $700,000 in speaking fees from Citadel, the financial empire run by billionaire Ken Griffin. Griffin runs a hedge fund and controls Citadel Securities, a giant market making firm that executes trades for Robinhood’s customers."
tehwebguy 6y ago
Interesting that anyone could genuinely utter the phrase “ethics waiver” without their face contorting permanently.
jcuenod 6y ago
Is this because of the potential threat of a dollar squeeze? Seems like the market is too deep for that... Or is it just about the impact of volatility and the cost to the system of covering positions? Why on earth are all the comments about her speaking fees? That paragraph was totally superfluous in the article.
TopInvestor 6y ago
https://www.zerohedge.com/markets/yellen-gets-ethics-waiver-lead-regulatory-crusade-against-hft-after-taking-700k-citadel https://www.zerohedge.com/markets/yellen-gets-ethics-waiver-... Once it became clear - just a few seconds after AOC first rage-tweeted about RobinHood refusing to let "the people" trade more shares of $GME and $AMC before adding that she'd support a public hearing on what had just happened - that all the key players in the "WallStreetBets"/"Gamestop" trading saga would soon be dragged in front of Congress like a gaggle of tech CEOs, the newly elected Democrats and their hand-picked economic team were faced with a critical question: who exactly was going to preside over these proceedings on the regulatory side, since they are virtually all compromised by key connections to the financial services industry, and not just the big banks. Over the past decade, a new category of financial beast has arisen. At Zero Hedge, we have been writing about them for years. They're alternatively called "high frequency traders" "high freaks", and "orderflow frontrunners" for those enjoy speaking the truth, or "market makers" for the political correct, but after the events of last week, millions of people were either asking Google, or their one IBD analyst friend, to explain what 'Citadel' is, and how it works.... the same Citadel which threatened to sue Zero Hedge last June for accusing it of frontrunning orders, just weeks before regulators punished Citadel for frontrunning orders (oops). Which is a problem because as a reminder, Yellen received almost a million dollars in "speaking fees" in the past two years from the firm that is the quasi-monopoly "market maker" in the US, responsible for half of retail orderflow thanks to its domination of Robinhood trades... “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. It then got downright surreal, when Psaki implied that it was sexist to mention Yellen’s conflict of interest because she’s a woman.
Jimmc414 6y ago
Interesting that this is now a much more generous title than, "Yellen Accepted $700K Speaking Fees from Citadel; Will Not Recuse from Hearing"

386 points by disgrunt 6y ago

For additional context, the most recent payments for speaking fees from Citadel were barely three months ago[1]: > The Chicago-based hedge fund paid Yellen $292,500 for a speech on Oct. 17, 2019, $180,000 for one on Dec. 3, 2019, and $337,500 to speak at a series of webinars held from Oct. 9-27, 2020. [1]: https://dailycaller.com/2021/01/28/janet-yellen-gamestop-citadel/ https://dailycaller.com/2021/01/28/janet-yellen-gamestop-cit...

mrits 6y ago
must be an amazing speaker
- Mizza 6y ago
  Speaker fees are a way of laundering bribes, plain and simple. Watch the docu on OxyCotin. Doctors who made the most in sales for the Sacklers got paid hundreds of thousands to give lectures.. that literally nobody attended. They all kept giving the lectures, time after time.
  - this_user 6y ago
    Pretty pointless to bribe someone who was a private citizen at that point, and who had no reasonably expectation of ever holding public office again.
    - lazide 6y ago
      And yet, not only became a public office holder after, but a key one overseeing and influencing the industry giving her the nominal 'bribe'?
      - this_user 6y ago
        Which was in no shape or form foreseeable at the time. They might as well have given that money to a random person on the street in the expectation that they might be put in charge of the SEC.
        Mizza 6y ago
        This is an absurd opinion. There was a very short list and her name was at the top.
    - qznc 6y ago
      If you have a solid reputation, the promise of speaker fees is enough of a bribe. "A Lannister always pays his debts."
  - throwaway5752 6y ago
    Just basic logical fallacy that "some people are bribed this way, ergo, she was bribed this way". This is a matter of public record, and she was made $7M in speaking fees in the past two years. It is a small percentage of her income, and not worth more a small fraction the future value of her reputation. The idea Yellen - one of just three living Fed chairs and one of the most influential figures in economics - would do political favors for $300k is honestly ridiculous. I have asked it elsewhere, but if you want to prevent this, you are making it illegal or disqualifying. I would personally like to know where the line would be drawn for public service. It seems like having an employment relationship would be far more influencing than a speaking engagement. It is important to emphasize this speech is disclosed and public knowledge.
    - Mizza 6y ago
      Bribery doesn't have to work the way you imagine it, sacks full of cash being exchanged in a dark parking garage in exchange for vote. It's just a reminder - when it comes to time make that big decision, hey, remember who your friends are. I of course think it should be both illegal and disqualifying. The line is very clear - reception or accepting the promise of large sums of money should be disqualifying for positions of high office. Simple as.

mensetmanusman 6y ago

Oligarchs have power.

DamnYuppie 6y ago

The most upsetting part about this is that it is completely expected that a politician will strive to do what is in their best interest and the interest of their supporters. Please note it doesn't matter what party you support politicians are generally all the same in that they use their positions to seek power and wealth from their positions at the expense of their constituents.

GizmoSwan 6y ago

Now that this is open information, they may have wasted all that cash. Let see what happens.

ordinaryradical 6y ago

Regulatory capture is a gigantic problem, especially in finance. It’s obvious that we don’t have the right incentive structure with the SEC, either. If you can make 20x more using the skills you’d need to investigate companies trading instead, the talent pool is reduced to those motivated by power/ideology. I’ve always thought financial regulators should have some kind of incentive structure that closes this gap but it’s not clear how to do that without skewing the enforcement priorities.

MattGaiser 6y ago
Or making some "government efficiency" watchdog group scream in anger. If Yellen were mostly interested in money, she has already chaired the Federal Reserve. 700K is a pittance compared to the millions she would earn in the private sector. Yet people begrudge her the 220K she does earn. Treasury Secretary and Chair of the Fed would be a multi million dollar a year jobs in the private sector.
- siscia 6y ago
  Not sure I get your point? 700k might be a small sum (I don't think it is, but ok) for her, but she still accepted it.
  - junipertea 6y ago
    The point was it’s not a small sum for her, it’s in fact more than triple her yearly salary. An adjacent point was she makes little compared to how much she could be getting, and people still complain. Her taking up that offer is no surprise.
    - deleted 6y ago
      [deleted]
    - MattGaiser 6y ago
      ^He got my point right
  - 6y ago

alexfromapex 6y ago

Which agency is responsible for investigating this conflict of interest?

willcipriano 6y ago
I think the FBI but they got yelled at in the 70s[0] for doing that sort of work and given new guidelines to prevent it[1] and apparently haven't done much like it since. [0]https://en.m.wikipedia.org/wiki/Abscam https://en.m.wikipedia.org/wiki/Abscam [1]https://oig.justice.gov/sites/default/files/archive/special/0509/chapter2.htm https://oig.justice.gov/sites/default/files/archive/special/...
- adolph 6y ago
  This wasn't quite the same but had fallout for some elected officials: https://en.wikipedia.org/wiki/Jack_Abramoff https://en.wikipedia.org/wiki/Jack_Abramoff Back in the news last June: https://www.courthousenews.com/lobbyist-abramoff-charged-in-cryptocurrency-case/ https://www.courthousenews.com/lobbyist-abramoff-charged-in-...
- buescher 6y ago
  Note that Abscam is evidence that it only takes about $50K in 1978 dollars (which would be about $200K today) to bribe a corruptable U.S. congressman.

yowlingcat 6y ago

Complex systems favor the wealthy.

trollski 6y ago
and bullshitters

sky_rw 6y ago

I don’t see any real pressure for her to recuse herself. The dominant political party in the USA ran on the simultaneous platforms of “the swamp is fake” and “the swamp is better than the alternative”. Well this is the swamp the populists were talking about. The democrats are now are emboldened with a clear mandate from the people that these relationships are an acceptable price to pay.

skinnymuch 6y ago
Whichever populists you’re talking about went along with the swamp being just as swampy as ever, if not more so during Trump’s tenure. Trump, Fox, and establishment Republicans all directly or indirectly said “the swamp is better than the alternatives”. See, for example, many of the excuses given for hiring all the 9 figure and up net worth cabinet members.
deleted 6y ago
[deleted]
wycy 6y ago
If only we could all get on the same page about this as a society. The previous administration ran the single swampiest administration in American history. The current administration is dramatically less swampy, but still as swampy as a typical administration. This is something that absolutely needs to be fixed in our society, and something that should unify 99% of people. But half of the country is under the delusion that the previous administration was somehow fixing this, simply because they said they were. This division makes it impossible to ever get anything done.

person_of_color 6y ago

Can an insider explain the shenanigans behind this? The speech is surely not worth that much. Is the exorbitant amount of money paid for the speech just an opportunity to be a patron of a "thought leader", i.e a legal bribe in other words?

runako 6y ago
Her speech is surely not worth that much to you. $700k is not a material amount of money for Citadel, especially if it may contain information that can give them an edge.
- jariel 6y ago
  It's a material amount that can only be spent in the context of 'getting something for it'. What that is is nebulous, and it could be something as simple as an introduction to someone as of yet unknown at a future date. But it's something worth $700K, not a 'speech'.
  - bidirectional 6y ago
    700k on several events that their employees will get excited for and can brag about to their (fellow finance professional) friends seems reasonable.
    - jariel 6y ago
      Yes, but also, when the next business cycle market crash happens, and the plebes are screaming about hedge funds, Citadel can also pick up the phone and call their 'friend' Janet Yellen, to introduce them to the Sec. Treasury, and that Senator who's putting putting up a huff about some new legislation. If you hire U2 to do a a private show for your staff, you don't get those kinds of added bonuses.
      - camel_Snake 6y ago
        Citadel is large enough I think she'd be obligated to pick up the phone regardless.

runako 6y ago

I've seen this a couple of times and I don't understand the outrage. Yellen is a financial professional. Would we expect her to a) not speak at Citadel if asked or b) request less than market rates for doing so? I really don't understand what people want from her.

AnimalMuppet 6y ago
We want (expect) her not to sit in judgment of the hand that feeds her.
- runako 6y ago
  > feeds Oh, if she's still receiving money from Citadel, I agree. If she's not still receiving money from Citadel, I don't see the relevance. I would expect anyone qualified for the job to have made paid speeches at any number of important financial institutions over the years. It wouldn't be in our best interests as citizens to have them recuse every time a matter concerning one of them arises.
  - nojokes 6y ago
    Yes, it would. It would eliminate clear conflict of interests.
  - defen 6y ago
    If Yellen had been appointed a judge instead of Secretary of the Treasury, and a court case involving Citadel came before her, would you expect her to recuse?
    - runako 6y ago
      I don't think giving a few speeches is worthy of recusal, no. Unless people are alleging that she entwined with them in some material way (e.g. consulting, advisory, etc.) then I honestly don't see the problem. The party who could have a problem is Citadel, who might be at risk for finding out that she gave the same speech for less money to a nonprofit.

addicted 6y ago

Is Citadel accused of doing something illegal?

disgrunt 6y ago
Doesn't matter. Yellen has a conflict of interest.
notahacker 6y ago
By Redditors who have wasted money following investment advice from other Redditors, yes. Specifically it's claimed that after Citadel gave a failing hedge fund lots of money to exit their position, the hedge fund lied about exiting its position and actually didn't start exiting its position until a different division of Citadel asked Robinhood to stop GME buys the following day. Focus on Yellen's speaking fee is simply trying to explain away in advance why many people given access to data which could prove it either way and tasked with investigating will conclude this baseless conspiracy theory is a baseless conspiracy theory.
vorpalhex 6y ago
Yes, several retail investors have accused them of acting illegally to protect their emergency loan to Melvin capital by raising their collateral fees for certain stock transactions, resulting in restrictions on GME buys. Citadel effectively has a conflict of interest in letting GME buys occur, and it was after they had that conflict that GME buys became restricted.

sgpl 6y ago

Unfortunately this is more the norm than the exception. On a tangent, something similar happened with a Canadian Charity called WE [1] and them being chosen to run a billion dollar grant program for Canadian students during covid. It later came out that the charity had paid speaking/appearance fees to the PM's family as well as to the finance minister at the time. After enough outcry from the media + opposition + people, the finance minister resigned and WE was stripped of the contract. [1] https://en.wikipedia.org/wiki/WE_Charity_scandal https://en.wikipedia.org/wiki/WE_Charity_scandal

monkeybutton 6y ago
Would it be wrong to characterize the WE charity as a "self licking ice cream cone"?

jariel 6y ago

'Speaking Fees' are absolutely the new form of fraud/bribery/kickback. It's the most arbitrarily thing imaginable, and you can just throw up any number for 'services performed'. After Obama completed his term, he was immediately on the 'Speaking Fee' tour, including several million paid by a group of Italian banks in desperation [1], totally insolvent - for a a 45 minute speech (!). I wonder if what they needed was a 'Pep Talk' from a 'Former President' ... or perhaps someone influential to put in a good word with the ECB to push for loser monetary policy that might help save failing Italian banks? I don't think speaking fees imply some kind of bad behaviour, but they are definitely smoke and often represent a conflict of interest. It's a little bit funny that people don't recognize this: $700K (or whatever large amount), this is a material amount of money, you don't just spend this for no reason, you 'get something' for it. As Hillary Clinton was about to win the 2016 presidency, masses of cash flowed into the Clinton Foundation (Norway and Australia were pumping in 10's of millions) but just as she lost - 'charitable donations' dried up. Have a look at this chart [2]. Just stare at this chart for a minute: massive cash flows to the charity someone expecting to be the most powerful person in the world, and then those cash flows completely evaporate as soon as we found it she wasn't going to have that power? So, did Norway, Australia and all these international agencies and governments magically decided to be 'less charitable' in 2016? Or was it that they were 'expecting to get something in return' for their massive charitable donations? Let's not be naive. It doesn't mean there is criminality or even excessive payments, but it's obviously a conflict of interest. If may be something as simple as 'The Norwegian Sovereign Wealth Fund wants 10 Minutes with the President, to get an introduction to some agency' - and that's it. A very expensive call, but possibly worth it. And this is not 'political' and certainly not 'one side of the aisle' it's just business. [1] https://www.express.co.uk/news/world/802063/Barack-Obama-speech-Global-Food-Innovation-Summit-Milan-private-speech-Wall-Street https://www.express.co.uk/news/world/802063/Barack-Obama-spe... [2] https://www.opensecrets.org/news/2018/12/clinton-foundation-revenue-low/ https://www.opensecrets.org/news/2018/12/clinton-foundation-...

NDizzle 6y ago

Imagine the media response if this was a Trump appointee. Imagine the billions in property damage due to peaceful protests if a Trump appointee didn't recuse themselves.

deepakhj 6y ago
I think Trump raised 300 million for stop the steal and didn't spend a dime on it. It all went to himself personally.
- TopInvestor 6y ago
  GOP , not Trump

vsskanth 6y ago

are there different ethics rules for "speaking fee" vs "consulting fee" ?

disgrunt 6y ago
The problem is not so much the speaking fee as she is now presiding over a meeting with regulators on a matter directly related to Citadel.

jb775 6y ago

"Speaking Fee" is the modern day term for bribe.

camel_Snake 6y ago
I think it's more of an expensive way to bring some cachet to your organization. Do you think every college graduation speaker is just being bribed?
- jb775 6y ago
  I think colleges do it for cachet, but finance companies do it for ROI. Think about the business models...The college business model depends on maintaining prestige to continuously attract applicants willing to pay high admission rates. The finance business model uses money to make more money, and the risk to reward ration can be swayed depending on decisions made by certain individuals.

syops 6y ago

Speaking fees is how one legally bribes politicians. Such is how my cynical self sees it. The Clintons earned over $150 in speaking fees since leaving the presidency. Does anyone think their speeches are worth $10 million a year? At the end of the Clinton presidency he signed into law a repeal of Glass-Steagall. Reagan famously was paid around $10 million after his presidency to give some speeches in Japan. He got rid of car import quotas. Perhaps I'm being too conspiratorial or cynical but it seems to me that this is the polite understanding between business and those with political power. We'll pay you a lot of money for very little work if you pass legislation that we like. https://www.cnn.com/2016/02/05/politics/hillary-clinton-bill-clinton-paid-speeches/index.html https://www.cnn.com/2016/02/05/politics/hillary-clinton-bill...

sixQuarks 6y ago
I can’t believe you’re even questioning yourself on this. OF COURSE it’s legal bribing.
- boston_clone 6y ago
  even in situations when you feel you may know all the facts, it's still healthy to doubt your conclusions!
  - sixQuarks 6y ago
    I don't claim to know all the facts, but at some point you have to stop being naive. It's obvious these companies expect some sort of political benefit for paying these outrageous speaking fees, the part we don't know is to what extent there is an "agreement". I will concede the agreements may not be communicated in any way, and just based on expectations. However, these fees would not continue to be paid if expectations did not continue to be mostly met.
sdflhasjd 6y ago
> over $150 in speaking fees I suppose that's technically true

psychlops 6y ago

If she finds for them, it's because they paid her. If she finds against them, it's because they didn't pay her enough. Seems like a great impartial position.

pradn 6y ago

The more absurd thing is criticism of Yellen on this part is being defended - by the White House press secretary no less - as a woman's right to use her skills to make money. Yes, women should absolutely be able to rise to their talent and ambition, but it's a clear conflict of interest for government official. It's a disingenuous use of the most vacuous forms of language to defend open corruption. But then again, if we wanted finance experts to chair the Fed and be the treasury secretary without any prior monetary relationships with banks and hedge funds, we would probably have just some academics. A lot of academics in economics/finance get paid for legal testimony on behalf of companies and such, too.

gedy 6y ago
I think this highlights an important blind spot some people have when they focus on identity politics. A huge gap between elites and the rest of society is somehow more okay if the elites are more diverse in gender or skin color. I don't feel it's much better but am at risk of being told I don't care about diversity or intentionally changing the subject.
- meowface 6y ago
  I have no problem with elites, personally. Just (alleged) corruption. I think most social justice advocates would agree that corruption and regulatory capture are bad. If anything, I'd expect a response more like "why are women like Yellen and Hillary Clinton being uniquely targeted with these accusations?" (whether they are or aren't). I'm not sure where the parent poster is sourcing the claimed identity-based defenses of her alleged corruption, though.
- bsanr2 6y ago
  I think you'll find that most people who focus on identity politics would rather have that gap closed for everyone, than to see specifically people who look like them in places of power why they themselves continue to languish. The issue is that these people who focus on identity politics aren't actually stupid and, in fact, do understand the rules of this game that they were swept into (without their consent, mind you): power accrues more power and tribalism is rampant. Under the status quo, people who've been marginalized in the past have a better chance when they increase their numbers in seats of power. Further, strides forward in economic and social wellbeing tend to leave them behind unless they speak up. So the dilemma in the situation you describe is between whether to ignore diversity concerns and in turn be ignored, or to speak up and risk losing class solidarity. It sucks that we have to make that decision; it would be better if less-marginalized people made proactive efforts to ensure we're involved in and will explicitly benefit from initiatives or movements that implicitly aligns with our interests.

trentnix 6y ago

Of course she won't recuse herself. That wouldn't benefit Citadel at all. And they paid her expecting benefits.

nojito 6y ago
If she doesn’t recuse there’s no hearing into robinhood at all.

trollski 6y ago

its the same as asking a prostitute to play a main role in a short porn movie in which you’re the second actor. totally legit and you ahould see the face if you ran into undercover operator on the orher end.

sub7 6y ago

Guys hate to be the one saying this, but $700k for speaking fees at this level is really not that much money and certainly not enough to influence someone who thinks in 4 commas. If Citadel accounted for 70% of all her speaking fees, that would warrant a closer look - this is a move along carry on for me.

ABeeSea 6y ago
Yea I’m surprised how quickly HN is jumping on the conspiracy train. This was an expensive employee perk; not a “legal bribe.”
- colinmhayes 6y ago
  I think it's more about the message this sends than actually thinking there's corruption. We just spent 4 years having our institutions especially those related to corruption torn down by the president. Now seems like a great time to ensure proper procedures are followed, even if they're a bit excessive.
WORMS_EAT_WORMS 6y ago
You're not wrong at all. But, I think the outrage here is a bit more general. Buying speeches is essentially influence tokens. Any amount and the idea it's happening for personal gain of a government official in America is what frustrates people. It kind of reads as if you're saying 'eh, it's not really that many influence tokens'. For example, if this amount is a "move along, carry on" for you, I'd be curious to know when you draw the line specifically?
throwaway5752 6y ago
It's just more appealing to believe in conspiracy theories and that the world is against you. Wait until these same people find out about various "senior advisors", board memberships, and think tanks! This isn't ideal but public service isn't a vow of poverty and someone will pay them. What is important (and appears to be the case here) is that they are public and disclosed. Citadel is only 10% of her overall speaking fees over two years. She owes them nothing.

vmchale 6y ago

I don't think citadel did anything shady here, seems like people misunderstanding things to get mad.

citilife 6y ago

Let's not forget, government regularly hands out massive amounts of money to private enterprise -- https://www.bloomberg.com/news/articles/2020-03-24/fed-hires-blackrock-for-agency-cmbs-corporate-debt-programs https://www.bloomberg.com/news/articles/2020-03-24/fed-hires... The "speaking" fees are really just bribes, lets me honest about it. It's so corrupt and so obvious and begs the question what are you going to do about it?

slt2021 6y ago

Citadel hedge fund (not the market maker) has a large short bet on GameStop and profits from short selling https://wallstreetonparade.com/2021/02/citadel-didnt-just-bail-out-a-gamestop-short-seller-citadel-also-had-a-big-short-position-in-gamestop/ https://wallstreetonparade.com/2021/02/citadel-didnt-just-ba...

gruez 6y ago
...according to a SEC filing in september 2020. Not exactly the up to date information.
- slt2021 6y ago
  their bets are long-term. same date 13F filing for Melvin Cap show short bet against GameStop as well, so we can safely assume they are on the same short side together. why would Citadel bail out melvin ?
  - gruez 6y ago
    >why would Citadel bail out melvin ? Same reason why people buy stocks when it's tanking (remember, for every seller there's a buyer): because they think the fund's undervalued and they can buy it at a discount.

j0ba 6y ago

You guys don't get it. Biden is restoring the soul of America - exactly how he sees it.

cbradford 6y ago

Whether or not she should have accepted the fees is not relevant, the point is she should recuse herself from any investigation into companies that she has a personal business relationship with. That is basic ethics. What is the reason she should not recuse herself?

dcolkitt 6y ago
Citadel is not being investigated. Citadel had nothing to do with the Gamestop meme mania, besides being a market maker that processed a lot of transactions. Anything else you hear is crackpot conspiracy theories with zero evidence. It'd be like saying "Why is this official with ties to Toyota not recusing themselves, when we already know that the mafia regularly drove cars! How deep does this go?!"
- cbradford 6y ago
  What are we investigating here? If we are investigating the market structure of equities and how that effected the shut down of trading to a specific class of investors, individuals, and not others, institutions, then absolutely Citadel is a major part of that. The are the primary PFOF market maker, and the #1 counterparty to Robinhood. Not saying that did happen, not saying it didn't, but Citadel is central to any conversation around equity market structure. When is it so vital that Yellen, who is an economist and former Fed official and not an expert at all in equity market structure, so vital to be involved in this investigation? What expertise does she have to no one on the SEC staff has?
  - dcolkitt 6y ago
    > If we are investigating the market structure Market structure is not the subject of the investigation. Market volatility is. In this case microstructure has absolutely zero to do with the volatility. It was caused by 7 million retail traders simultaneously joining a poorly thought out pump and dump. That would create volatility regardless of the mechanics of how orders are crossed. > Not saying that did happen, not saying it didn't, but Citadel is central Spoiler: It didn't happen. Robinhood already publicly confirmed that the issue was them running out of collateral at the clearinghouse. Citadel confirmed that it never stopped accepting orders. The DTC confirmed that it raised the margin on GME, causing Robinhood to near its margin calls. JP Morgan and Goldman confirmed that Robinhood drew down its credit lines. Dozens of other brokers, most without ties to Citadel, restricted trading at the same time citing the same clearinghouse issues. The SEC could easily verify all of this. It would necessitate a giant conspiracy involving hundreds of potential whistle-blowers across a dozen companies all risking jail time. And somehow there's zero evidence of any of it. This has become the stock market equivalent of QAnon at this point.

DaniloDias 6y ago

Why anyone has any faith or belief in our coruptacracy is beyond me.

tunesmith 6y ago

I'm pretty astonished at the level of certainty going on here that this was corrupt. Isn't spouting off on that the easy path? Can it at least be accepted that it is possible to accept speaking fees without engaging in a quid pro quo for later favors? Given that, shouldn't there be a hint of evidence that there is some sort of actual agreement or plans to do a bribed action, aside from the speech and speaking fees themselves?

jaywalk 6y ago
It's probably corrupt. But even if it's not, people recuse themselves for far less all the time. The fact that she is refusing to do so is, quite honestly, disgusting.
philosopher1234 6y ago
Why are Janet yellens (or really anyone’s) speeches worth 700k? What could she possibly teach citadel employees in that short time that could generate so much value?
threwawasy1228 6y ago
No, it is so highly improbable that someone would receive the equivalent of a years tech salary in SV for a handful of speeches that the act itself is immediately suspect. If we required the kind of evidence that you are talking about no bribery cases would ever be put forward. Also, what you are asking for is NOT required by law to bring forward such a case legally speaking. You aren't required to have a smoking gun.

the_solenoid 6y ago

One chance to prove you are not bought. I don't have much hope but this is a big enough test early enough.

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jswizzy 6y ago

CNN just ran a story about Biden separating kids from their parents at the border and putting them in cages

morpheos137 6y ago

There should absolutely be a cap on "speaking" fees a current or former Government official should be able to receive. It is absolutely institutionalised corruption or post facto bribery.

lovecg 6y ago
Life finds a way. If not speaking fees it would be book royalties or any number of other schemes. Maybe we can have severely increased taxes beyond certain point on government officials?

balozi 6y ago

You have to wonder, why would the hedgies pay her that kind of money for speaking engagements while she was still a civilian? Did they foresee that she would be their regulator in the near future?

f430 6y ago

The whole hedge fund colluding conspiracy has been debunked [1] RH and Citadel weren't colluding at all. It was their clearing house (Apex, which is used by almost 50% of brokerage firms) that demanded they raise the collateral by 100% which in turn required the brokers to stop transferring shares as the clearing house were not comfortable with floating large number of shares with limited quantity and high volume. I'm afraid that because WSB has politicized this to "David vs Goliath" without even considering that a small group of their users ARE the real Goliaths, hyping and mobilizing their userbase incapable of critical thinking to drive share prices up and down. Now they are simply going to make life more difficult for retail traders and we are going to see new regulations against using social media to pump up stocks. I hope that those people who were pumping up $GME, saying it was going to $30,000 have been using Tor or VPN. The conspiracies coming out of WSB has been nothing short of Qanon-like in terms of its vigor, fixation and paranoia. It feels exactly like what r/the_donald was in 2016 before they were rightfully shut down. [1] - https://news.ycombinator.com/item?id=26016048 https://news.ycombinator.com/item?id=26016048

fallingknife 6y ago

We are compensating high office holders all wrong. We are paying them pennies on what they could make in the private sector for a similar position of power, and leaving them to make up the difference by extracting money from favors and prestige. It virtually guarantees corruption. They should be paid an enormous salary plus an excellent pension for life, with the caveat that they are not allowed to accept income from any other source for the rest of their life. This would not be a lot of money. If we paid everyone in the house, senate, and cabinet $10M / y, that would cost < $5B per year, which is nothing to the government. You could make the pensions like $2M / year, and the total cost would probably come in at < $10B.

lovecg 6y ago
I agree except for the prohibition on other sources of income. I do want some of these people to write memoirs for example. The exact amount is something that needs careful consideration as well, more is not always better. At $10M a year you’ll end up with a “rest-and-vest” congress full of checked out do-nothings (granted some people prefer that).

PaulHoule 6y ago

I wrote her a letter (paper) asking her to withdraw her ethics waiver. Who grants this waiver? Can I write to somebody who can prevent her from getting it.

jinkyu 6y ago

well at least Biden doesn't make any mean tweets

JoshTko 6y ago

It seems that the biggest underling issue is that people are at key junctures to make decisions for groups. We have the technology to directly vote, we should change out Govt to more freely allow for that.

sanguy 6y ago

We all moaned and sighed and called Trump and family a bunch of grifters. Now we get Biden and his administration of professional grifters. It should shock us all it costs 1.9T for a country with 330 million peopled to give 150 million of those $2000. That means 1.6T in grift going down.....

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orange_tee 6y ago

On the one hand $700k is more than a lifetime of savings for many. On the other hand I sometimes get surprised by how cheap the most influential politicians in the world are. I guess this sort of thing is regular enough so it adds up?!

noisy_boy 6y ago

The amount of mental jugglery in the comments in amusing. It is as if it is physically impossible and greatly naive to expect/have a person with great integrity in their financial/ethical conduct for public office while that is the very criteria that is tooted from the roof-tops whenever public office is concerned.

josefresco 6y ago

How much did Mnuchin's vacations cost taxpayers? Oh yeah ... more. "In the report, the OIG reviewed nine travel requests by Mnuchin for military air transportation since March 2017, of which seven were approved and taken, one was withdrawn, and one was approved with travel pending in late October 2017.[110] The total cost of the seven trips taken was $811,800, calculated from per-hour cost and operating hours for the specific aircraft, or Air Force-provided direct costs of operations." And this was MY money he torched, not wallstreet And this was just ONE of the shady things he did while serving. I'll take Yellen 7 days out of the week if the alternative are ghouls like Mnuchin.

kristjansson 6y ago

Speaking fees turn prestige into money, and money into prestige. People that are more famous than rich get a little richer; institutions get to associate themselves with those people, and be the kind of place where you might see those people. A simple transaction, if a bit grubby for injecting money into social capital relations. That all seems fine! Most speaking fee arrangements - even with politicians - seem to me to be in this mode. Are there cases where kickbacks or bribes are given as speaking fees? Sure, elsewhere in this thread there's discussion of no-name doctors (who happened to prescribe lots of Oxycontin) giving lectures to empty halls for hundreds of thousands of dollars seems like a bribe. But that's because the no-name MD is getting _way_ more than the going rate for his status! When the speaker is already well known, the institution is already getting something for its money, so overlaying an implication of clandestine, speculative (retroactive?) quid pro quo is an unnecessary over-read. Also, like, Barney Frank is on the board of a bank. Chris Dodd asks 40-70k to speak. Mike Oxley worked for NASDAQ. These 'sinecures' don't seem like they're conditional on passing laws that Wall St. likes.

dang 6y ago

The submitted title was "Yellen Accepted $700K Speaking Fees from Citadel; Will Not Recuse from Hearing". That broke the site guidelines, which ask: "Please use the original title, unless it is misleading or linkbait; don't editorialize." Cherry-picking a detail and making that the title instead is the primary form of editorializing, so please don't do that. Titles are by far the biggest influence on threads. On HN, submitting an article doesn't confer any special right to frame the content for everyone else. If you want to say what you think is important about an article, that's fine, but do it by adding a comment to the thread. Then your view is on a level playing field with everyone else's. https://hn.algolia.com/?dateRange=all&page=0&prefix=false&sort=byDate&type=comment&query=%22level%20playing%20field%22%20by:dang https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so...

disgrunt 6y ago
The Bloomberg title is the misleading one if you read the article. The heart of the article covers Yellen's ethical issues, but for whatever reason Bloomberg chose the most benign title possible. I thought it was in HN's interest to not have the lead buried. I suggest HN have exceptions to this editorialization rule in cases like this.
- dang 6y ago
  Yes—that's a fair point. It comes up a lot in the slightly (but not entirely) different context of press releases: https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sort=byDate&type=comment&query=corporate%20press%20release%20by:dang https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor..., which are a lede-burying genre par excellence. The current article is arguably a borderline case, but it takes a long time to get to the ethics issue and I'm not sure that's what the bulk of it is about. Maybe it should be, but that's more of an editorial point.

kaesar14 6y ago

I find my problem with people defending figures like Yellen accepting speaking money is that they will often put forward the most charitable explanation of this behavior. "She's an accomplished woman who held one of the most powerful positions in global financial regulation! Of course big banks and hedge funds want her to come and speak." Why should we give our public officials the benefit of the doubt? Why should they get the charitable viewpoint? Imo, if you hold the absolutely shocking amounts of power someone like Yellen does, where your post has significant control on the oversight and regulation of the most powerful free market economy in history, you NEED to have your feet held to the fire with regards to stuff like bribery. Our system has become corrupted due to charitable explanations.

rudedogg 6y ago

FYI, previous title on HN was "Yellen Accepted $700K Speaking Fees from Citadel; Will Not Recuse from Hearing". That's why it's the main topic in the comments. > "Yellen received more than $700,000 in speaking fees from Citadel, the financial empire run by billionaire Ken Griffin. Griffin runs a hedge fund and controls Citadel Securities, a giant market making firm that executes trades for Robinhood’s customers."

tehwebguy 6y ago

Interesting that anyone could genuinely utter the phrase “ethics waiver” without their face contorting permanently.

jcuenod 6y ago

Is this because of the potential threat of a dollar squeeze? Seems like the market is too deep for that... Or is it just about the impact of volatility and the cost to the system of covering positions? Why on earth are all the comments about her speaking fees? That paragraph was totally superfluous in the article.

TopInvestor 6y ago

https://www.zerohedge.com/markets/yellen-gets-ethics-waiver-lead-regulatory-crusade-against-hft-after-taking-700k-citadel https://www.zerohedge.com/markets/yellen-gets-ethics-waiver-... Once it became clear - just a few seconds after AOC first rage-tweeted about RobinHood refusing to let "the people" trade more shares of $GME and $AMC before adding that she'd support a public hearing on what had just happened - that all the key players in the "WallStreetBets"/"Gamestop" trading saga would soon be dragged in front of Congress like a gaggle of tech CEOs, the newly elected Democrats and their hand-picked economic team were faced with a critical question: who exactly was going to preside over these proceedings on the regulatory side, since they are virtually all compromised by key connections to the financial services industry, and not just the big banks. Over the past decade, a new category of financial beast has arisen. At Zero Hedge, we have been writing about them for years. They're alternatively called "high frequency traders" "high freaks", and "orderflow frontrunners" for those enjoy speaking the truth, or "market makers" for the political correct, but after the events of last week, millions of people were either asking Google, or their one IBD analyst friend, to explain what 'Citadel' is, and how it works.... the same Citadel which threatened to sue Zero Hedge last June for accusing it of frontrunning orders, just weeks before regulators punished Citadel for frontrunning orders (oops). Which is a problem because as a reminder, Yellen received almost a million dollars in "speaking fees" in the past two years from the firm that is the quasi-monopoly "market maker" in the US, responsible for half of retail orderflow thanks to its domination of Robinhood trades... “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. It then got downright surreal, when Psaki implied that it was sexist to mention Yellen’s conflict of interest because she’s a woman.

Jimmc414 6y ago

Interesting that this is now a much more generous title than, "Yellen Accepted $700K Speaking Fees from Citadel; Will Not Recuse from Hearing"