I work in the industry, at a competitor, and while the people at Citadel may be reasonable, Citadel itself is absolutely a horrific monster, the Godzilla of the HFT space, destroying and devouring everything in its path. It makes a huge chunk of revenue from payment for flow, which is arguable of little economic value (and banned in many countries), securing an unfair advantage to itself through political means (lobbying etc. to enable this) rather than through honest competition in the market.
I don't have a magic policy answer here, but any long-term solution will not involve finger pointing at individuals doing legal things.
That ethos becomes more important the higher ones station becomes in politics and business.
I am not accusing Yellen of anything improper, however these transactions give circumstantial support to those who may believe she acted or will act in an improper way.
It is also typically considered a good thing when public servants are financially stable as it makes them less susceptible to influence.
You're right there's no smoke in the room, there's only a massive multi-billion dollar corporation buying influence from someone powerful in government in the room. That this is not totally obvious to everyone is extremely worrisome.
I think many people see the extremely wealthy such as those running Citadel as the people who play by different rules than the rest because of their wealth. Does that make them evil? I don’t think so, but I’m not going to pretend that having the wealth and relationships to get political favors means you earned your wealth fairly.
Side note: many people you imagine to come from a smoke-filled room of evil (Citadel?) are much more reasonable once you get to know them. It’s not like everyone in finance is actually a reptile.
Instead we should focus on making the economic game fairer. I think Janet would agree.