Janet Yellen, Biden’s current Treasury secretary and a former head of the Federal Reserve under Obama, earned $810,000 in speaking fees from Citadel LLC, one of the hedge funds currently embroiled in the mania surrounding the price of GameStop stock.

The Biden administration appears to think that there is nothing untoward about this.

The GameStop Saga

News about the explosion in the price of GameStop (GME) shares has been erupting all over the financial press over the last few days. The general saga runs roughly as follows.

GameStop, a brick-and-mortar video game retailer, has long been a company in decline. More and more people have been either buying games online or streaming them, making its business model obsolete. The nationwide store closures resulting from COVID-19 have only made matters worse for the company.

Knowing this, a number of hedge funds—particularly one called Melvin Capital—took out enormous short positions in the stock in the expectation that its price would continue to drop. Briefly, this means that companies like Melvin borrowed GameStop shares and sold them onto the open market, agreeing to buy them back and return them to their owners at a future date. If the price of GME were to drop between when Melvin sold the shares and when it had to buy them back, Melvin would pocket the difference.

However, Melvin actually shorted more GME shares than exist, about 140% of the total. This is known as naked short selling. Noticing this, a group of people on both 4chan and Reddit’s WasStreetBets subreddit decided to collectively buy up enormous quantities of the stock in order to push up its price and force Melvin to take catastrophic losses when the time came for it to cover its shorts.

About three weeks ago, GME was worth less than $20 per share. Now, as of the close of trading on January 29, the price hovers at over $300. At a price like this, Melvin Capital would be immediately bankrupted after covering its shorts.

Brokerage firms from TD Ameritrade to E-trade and Robinhood all responded by restricting trading in GME and a few other stocks, sparking outrage among the Redditors. Rumors have circulated that these brokerage firms may have received calls from the White House telling them to restrict trading and protect Melvin and other hedge funds from looming bankruptcy.

Furthermore, Citadel LLC, another hedge fund, has also responded by providing Melvin with a $2.75 billion dollar injection of liquidity. Melvin is still threatened with bankruptcy.

Yellen’s Ties to Citadel

Inevitably, calls have come for the government to intervene. Janet Yellen, the Treasury secretary, has said so far that the Biden administration is “monitoring the situation.” It remains unknown what, if any, course of action the government will take.

However, news of Yellen’s financial connection to Citadel has raised suspicions. Citadel paid Yellen $810,000 in speaking fees. White House press secretary Jen Psaki was asked about these connections at a recent press briefing but dismissed the concerns as no big deal. Psaki simply said in response that Yellen is “one of the world-renowned experts on markets, on the economy,” and that Melvin paid her for her expertise.

Critics, however, insist that this creates a conflict of interest.