Federal Chairwoman Janet Yellen wrote a letter to two members of Congress acknowledging the investigation and noted she had a meeting with Medley Global Advisors. Yellen said that meeting was not relevant to the leak investigation as it occurred during a different time and period and she would never divulge confidential information.
The information contained within a FOMC can be very lucrative for traders given that the decisions made at FOMC meetings undeniably move markets. Knowing about that confidential inside information before it is announced could lead to millions if not tens of millions of dollars in gains for Wall Street speculators.
Ms. Yellen said her own name was among those on the list of Fed officials who had contact with Medley Global Advisors, a firm that sells analysis and reporting to investors. Medley issued a report in October 2012 containing detailed information about the prior meeting of the Federal Open Market Committee, or F.O.M.C., in September. Ms. Yellen said, however, that her meeting took place in June.
“Nothing Medley Global Advisors reported in October about the events of the September 2012 F.O.M.C. meeting could have been conveyed in June, and let me assure you that, in any case, I did not convey any confidential information,” she wrote in the letter, which was posted on the Fed’s website Monday evening.Of course, if Yellen did not convey any confidential information - what was the point of the meeting? Medley can read public statements just fine, the firm makes its money by providing its clients with information they can not get elsewhere.
The Fed FOMC leak case comes just a short time after the New York Federal Reserve was involved in the leaking of confidential information to Goldman Sachs. The head of the New York Fed, William Dudley, is the former Chief Economist of Goldman Sachs. The incestuous nature of Wall Street and its "regulators" has proven to be problematic again and again - it will be interesting to see how far DOJ takes this case.