Fed chief met firm at heart of leak probe, denies impropriety

May 05, 2015 08:38
Janet Yellen says she did not reveal any confidential information during her meeting with Medley Global Advisors in June 2012. Photo: Reuters

Federal Reserve chief Janet Yellen met with a research firm that later published confidential details from the central bank but said she did not know where the information had come from, 

Yellen met with Medley Global Advisors in June 2012, months before the firm unveiled details of a September Fed meeting a day ahead of the publication of the central bank's own record of the discussions, Reuters reported Tuesday, citing Yellen's letter to lawmakers. 

The Justice Department is investigating Medley over a possible leak of information from the Fed.

"Nothing Medley Global Advisors reported in October ... could have been conveyed in June, and let me assure you that, in any case, I did not convey any confidential information," Yellen said in the letter to Republican lawmakers Jeb Hensarling and Sean Duffy.

Yellen said she would also disclose the names of other staff members who had been in touch with the firm.

In March, Yellen said the central bank's internal watchdog, the office of the inspector general, was investigating the matter.

At the policy-setting meeting, Fed officials laid the groundwork for the massive bond-buying stimulus they were to roll out later that year.

Early knowledge of that discussion could have given traders an unfair edge.

The probe comes as politicians such as Hensarling raise pressure on the Fed to tell the public more about its inner workings, including its decisions about monetary policy.

Hensarling, head of the financial services committee, wrote to Yellen in March to express his concern about lack of response to an earlier letter by Duffy, who heads the an oversight sub-committee.

In that letter, Hensarling said that an internal probe by the Fed's general counsel was dropped at the request of several members of the Federal Open Market Committee, the group that sets the central bank's interest rate policy, and that a criminal investigation into the matter was pending.

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