Richard Clarida, the Federal Reserve’s vice chair who has come under fire for trading during the financial crisis caused by the epidemic, announced on Monday that he will leave the board effective Friday.
Clarida made the news in the form of a letter to President Joe Biden, two weeks before his resignation was to take effect.
“With my statutory term as governor expiring on January 31, 2022, I am writing to advise you that I intend to resign from the board on January 14, 2022,” he wrote to the president.
The Fed released the letter on Monday.
Clarida conducted stock trades in February 2020, just as the Fed was ready to intervene and save the economy in the early phases of the coronavirus pandemic.
According to The New York Times, Clarida recently modified disclosure forms to show that he purchased shares in an investment fund that owns equities on Feb. 27 — despite the fact that he purchased the same fund three days earlier.
The shift into and out of stock options occurred when the markets were collapsing as a result of the coronavirus outbreak.
Clarida is the third senior Fed member to resign as a result of disclosures concerning stock trades made right before the markets crashed.
Other top Fed officials, like Chair Jerome Powell, Dallas Fed President Robert Kaplan, and Boston Fed President Eric Rosengren, cashed out despite knowing of the bank’s strategy to stimulate financial markets during the pandemic.
Richard Clarida was chastised for trades he made during the financial crisis caused by the COVID-19 epidemic.
Both Kaplan and Rosengren resigned after The Wall Street Journal reported on the transactions.
Powell also sold up to $5 million in stock options in the fall of 2020, just before the markets crashed.
Despite resistance from his own party, including progressive Senator Elizabeth Warren, Biden just nominated Powell for a second term.