The Gamestop story is a strange, complicated saga, and every additional detail feels stranger than the last. One more recent element has to do with the Biden administration, which has thus far been monitoring the situation. Now, Treasury Secretary Janet Yellen and Press Secretary Jen Psaki have both been pulled into the story thanks to questions around their ties to the investment app Robinhood.
Is Jen Psaki related to Jeff Psaki?
Jen Psaki has only been the White House Press Secretary for a little over a week, but there are already people asking questions about her possible conflicts of interest. This comes after some savvy internet users discovered that someone named Jeffrey Psaki works as a portfolio manager at the hedge fund Citadel LLC. Citadel has been accused of forcing Robinhood to stop most trading on Gamestop and other highly volatile stocks.
Citadel has denied these rumors, saying that they did not pressure Robinhood to prevent people from trading on these stocks. Like many hedge funds, Citadel was somewhat rocked by the incredible uptick in Gamestop's stock after Reddit users artificially raised the price, leading to massive losses for investors who had bet that the stock's price would continue to go down. Citadel also infused almost $3 billion into Melvin Capital, which saw major losses as a result of the rise in Gamestop stock.
Although Jen's relationship to Jeff could be perceived as a conflict of interest, there is virtually no evidence suggesting that the two of them are actually related. They do share a last name, but very little is known about Jeff, who is not a public figure. Jen has not disclosed any connection to the firm, and has not faced any scrutiny from the press over possible ties yet.
What is Janet Yellen's connection to Citadel?
Although Jen Psaki's connection to Citadel is largely a rumor, Treasury Secretary Janet Yellen does have a firmer connection to the hedge fund. Before assuming her role as Treasury Secretary, she received more than $800,000 from the fund as a speaking fee. The news of Yellen's speaking fee presents the possibility that she has a conflict of interest.
When asked about Yellen's potential conflict, Jen Psaki refused to say whether she had any plans to recuse herself from advising the president on matters related to the Gamestop story. Jen did say that, because Yellen was considered an expert in economic matters long before she joined the Biden administration, it made sense that companies like Citadel would pay to hear her perspective.
The price of Gamestop's stock rose from below $20 to as high as more than $480. The increase in Gamestop's stock has been viewed as historic, in part because the increase came as a result of Reddit users who decided to buy the stock en masse in order to artificially inflate its value. Although some have suspected that the actions of the Reddit users must be illegal, most experts agree that their actions were entirely in compliance with current financial regulations.