Kevin Warsh, the incoming chair of the U.S. Federal Reserve (Fed), decided to sell a large portion of his equity in Coupang Inc., the parent company of Coupang, ahead of taking office. The move is to comply with U.S. federal ethics rules that bar the Fed chair, who sets currency policy, from holding individual corporations' stocks or serving concurrently as a director.
According to the U.S. Securities and Exchange Commission (SEC) filing system on the 16th (local time), Chair Warsh on the 15th submitted a Form 144, a notice of proposed sale, stating he would dispose of 102,363 shares of his Coupang Class A common stock. The sale will be carried out on the New York Stock Exchange through JPMorgan Securities. The aggregates proposed for sale listed in the filing total about $1,681,998 (about 2.5 billion won). Given that the proxy statement Coupang filed this year shows Warsh's effective equity holdings at 459,102 shares, the planned sale represents about 22.3% of his total holdings.
Along with the stock sale, Warsh also stepped down from Coupang's board. In a separate filing (Form 8-K/A), Coupang said Warsh immediately resigned from his directorship as of the 13th, when the U.S. Senate confirmed his appointment as chair. Coupang said, "The resignation is not due to any disagreement with the company on operations, policies, or practices." Earlier, after U.S. President Donald Trump named him the next chair in January, Warsh notified the company in early February that he would resign from the board upon confirmation.
The equity unwind and resignation from the board are pursuant to an ethics agreement with the U.S. Office of Government Ethics (OGE). Under the agreement, Chair Warsh must sell all Coupang shares he holds as soon as practicable after Senate confirmation, and no later than within 90 days. Until all shares are disposed of, he cannot take part in matters that could directly affect Coupang's financial condition. The roughly 350,000 shares not yet sold are also expected to be disposed of within the deadline through partitioning sales.
Market analysts said the equity sale is a routine administrative step unrelated to Coupang's corporations value. Rules on stock holdings by senior Fed officials were tightened after past insider transaction controversies. The Office of Inspector General (OIG) of the U.S. Federal Reserve said in a related report that the obligation for senior officials to divest assets is "intended to preempt potential conflicts of interest and maintain public trust in the fairness and integrity of Federal Open Market Committee (FOMC) operations."