White House press secretary Jen Psaki said Thursday it “shouldn’t be a surprise” that Treasury Secretary Janet Yellen was paid to speak to Wall Street, including a hedge fund involved in the GameStop populist investing struggle.
Yellen, a former Federal Reserve chairman, was paid $810,000 by hedge fund Citadel for three events in 2019 and 2020, according to disclosure forms.
The firm reportedly infused $2 billion into Melvin Capital Management, a hedge fund hammered by losses in the GameStop struggle waged by smaller investors.
“Separate from the GameStop issue, the secretary of 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 — before she came in to be the Treasury secretary, I should say,” Psaki said at a White House briefing.
Small-dollar investors banded together on a Reddit forum to buy GameStop stock and reap financial windfalls from hedge funds that were “shorting” the stock, or using an investing strategy that rewards them if the value decreases.
The hedge funds incurred significant losses by predicting declining value for GameStop. Instead, the stock value of the flailing video game retailer soared, forcing the hedge funds to pay the new investors the difference.
The Securities and Exchange Commission said it’s reviewing the stock-buying campaign, and stock-trading platform Robinhood this week shut down purchasing of GameStop stock — enraging leftist and populist right-wing politicians who say big business and the government are unfairly focused on small investors rather than wealthy stock-shorting profiteers.
Yellen, whose agency is a powerful financial regulator, made $7 million from banks and Wall Street firms in 2019 and 2020, according to her financial disclosure forms.