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(Huffington Post)   Regulator at NY Fed takes on Goldman Sachs, is promptly fired   (huffingtonpost.com) divider line 41
    More: Obvious, Goldman Sachs, Federal Reserve, ProPublica, New York Fed, funds, Santander, Societe Generale, Cornell Law School  
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4182 clicks; posted to Business » on 15 Oct 2013 at 12:59 PM (40 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



41 Comments   (+0 »)
   
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2013-10-15 12:58:52 PM
So he was Sached?
 
2013-10-15 01:01:58 PM
Why do you think investment banks are only prosecuted at state level?  The Fed officials need a sweet job some day, and actually doing their jobs and regulating Wall Street would interfere with that.  So they turn a blind eye, and after their stint at the Fed they get a nice cushy 7 figure position sharpening pencils.
 
2013-10-15 01:10:32 PM

Marcus Aurelius: Why do you think investment banks are only prosecuted at state level?  The Fed officials need a sweet job some day, and actually doing their jobs and regulating Wall Street would interfere with that.  So they turn a blind eye, and after their stint at the Fed they get a nice cushy 7 figure position sharpening pencils.


or become the new Federal Reserve Chairman
 
2013-10-15 01:16:16 PM

dittybopper: So he was Sached?


He was a she.
 
2013-10-15 01:17:44 PM

mr lawson: Marcus Aurelius: Why do you think investment banks are only prosecuted at state level?  The Fed officials need a sweet job some day, and actually doing their jobs and regulating Wall Street would interfere with that.  So they turn a blind eye, and after their stint at the Fed they get a nice cushy 7 figure position sharpening pencils.

or become the new Federal Reserve Chairman


I'm pretty sure there's a conveyor belt that shuffles people in between the NY Fed and Goldman Sachs.
 
2013-10-15 01:20:49 PM
Color me surprised.
 
2013-10-15 01:21:24 PM
Just ask  Sergey Aleynikov if anyone should mess with the Goldman Sachs.

I mean, common -one of their founders has his own action figure -and it's collectible. You just don't mess with that.
 
2013-10-15 01:22:45 PM
Having worked for a highly regulated company within the financial services arena, you'd be surprised how much influence the company has over its examination findings.

Then again, maybe you wouldn't be surprised.
 
2013-10-15 01:28:06 PM

jankyboy: Having worked for a highly regulated company within the financial services arena, you'd be surprised how much influence the company has over its examination findings.

Then again, maybe you wouldn't be surprised.


Not surprised at all. My only real surprise is how badly the New York Fed & Goldman Sachs covered their tracks here - they could've handled this more adroitly. It's a truly scummy thing to do, but that's what happens when you commit to regulatory theater while refusing to provide regulatory authority.
 
2013-10-15 01:35:00 PM

FormlessOne: jankyboy: Having worked for a highly regulated company within the financial services arena, you'd be surprised how much influence the company has over its examination findings.

Then again, maybe you wouldn't be surprised.

Not surprised at all. My only real surprise is how badly the New York Fed & Goldman Sachs covered their tracks here - they could've handled this more adroitly. It's a truly scummy thing to do, but that's what happens when you commit to regulatory theater while refusing to provide regulatory authority.


Why bother?  Given the attention span and the non-existent memory of the general public, covering their tracks would have likely been more expensive than just letting it play out.  The suit will either get dismissed or settled for an "undisclosed" sum and the story will serve as a good lesson to any future "regulators" that they should play by the rules or end up as fodder on a left wing media site.

It's like they took a page straight out of the Republican playbook:  Say whatever you want because no one will hold your feet to the fire.
 
2013-10-15 01:40:13 PM
They left the regulator alive? Something doesn't add up here.
 
2013-10-15 01:42:49 PM
Why on earth fire Carmen Segarra?
 
2013-10-15 01:50:07 PM

HotIgneous Intruder: dittybopper: So he was Sached?

He was a she.


so... you are saying they deSached him?
 
2013-10-15 01:58:02 PM

FormlessOne: jankyboy: Having worked for a highly regulated company within the financial services arena, you'd be surprised how much influence the company has over its examination findings.

Then again, maybe you wouldn't be surprised.

Not surprised at all. My only real surprise is how badly the New York Fed & Goldman Sachs covered their tracks here - they could've handled this more adroitly. It's a truly scummy thing to do, but that's what happens when you commit to regulatory theater while refusing to provide regulatory authority.


Add me to the not surprised list.
 
2013-10-15 02:03:51 PM

HotIgneous Intruder: dittybopper: So he was Sached?

He was a she.


You know, there are multiple possible meanings for the word.


www.propublica.org

I'd Sach it.
 
2013-10-15 02:06:44 PM

Marcus Aurelius: Why do you think investment banks are only prosecuted at state level?  The Fed officials need a sweet job some day, and actually doing their jobs and regulating Wall Street would interfere with that.  So they turn a blind eye, and after their stint at the Fed they get a nice cushy 7 figure position sharpening pencils.


Please. Do you know how many GS people are or were in Obama's staff? They own him. The feds will do nothing.
 
2013-10-15 02:16:00 PM

Nemo's Brother: Marcus Aurelius: Why do you think investment banks are only prosecuted at state level?  The Fed officials need a sweet job some day, and actually doing their jobs and regulating Wall Street would interfere with that.  So they turn a blind eye, and after their stint at the Fed they get a nice cushy 7 figure position sharpening pencils.

Please. Do you know how many GS people are or were in Obama's staff? They own him. The feds will do nothing.


Well of COURSE they're in the White House.  We're talking about the Federal Reserve here.  Goldman Sachs has been planted firmly in the White House for decades.
 
2013-10-15 02:28:58 PM

Marcus Aurelius: Nemo's Brother: Marcus Aurelius: Why do you think investment banks are only prosecuted at state level?  The Fed officials need a sweet job some day, and actually doing their jobs and regulating Wall Street would interfere with that.  So they turn a blind eye, and after their stint at the Fed they get a nice cushy 7 figure position sharpening pencils.

Please. Do you know how many GS people are or were in Obama's staff? They own him. The feds will do nothing.

Well of COURSE they're in the White House.  We're talking about the Federal Reserve here.  Goldman Sachs has been planted firmly in the White House for decades.


And the Federal Reserve as well.
 
2013-10-15 02:45:20 PM
hope she kicks their asses and exposes the corruption for us all to see in federal court.
 
2013-10-15 03:00:12 PM
could have been worse.

img818.imageshack.us
 
2013-10-15 03:04:45 PM

snuffy: hope she kicks their asses and exposes the corruption for us all to see in federal court.


Yeah, that will happen.
 
2013-10-15 03:42:17 PM
dilbert.com
 
2013-10-15 04:02:49 PM
Elizabeth Warren for President!

I'd sach that! Honesty is sexy.
 
2013-10-15 04:20:10 PM
How many men did she take on?
 
2013-10-15 04:23:33 PM
I had an IT Examiner from the NY FED tell me that he had a finding signed-off and written up for one of the large financial institutions.  Then it comes down to him from the boss's boss that this isn't as big of issue and he has written up and it gets watered down to nothing.  He looks up the bank officer and his boss's boss and they went to school together.

As all these findings are a matter of interpretation and subjective determination of importance (e.g. Observation, Matter Requiring Attention, Matter Requiring Board Attention) so it is easy to water them down if you want.

However, in this case, the issue that I would hang my hat on is:

"The discussion turned to the name of the group that oversaw conflicts at Goldman: "Business Selection and Conflicts Resolution Group." Segarra's supervisor, Johnathon Kim, asked if business selection and conflicts were, in fact, two different groups. He was told they were not, the minutes show. "
Given the Fed's requirements, the regulators were stunned, Segarra recounted in an interview. "Our eyes were open like saucers," she said. "Business selection is about how you get the deal done. Conflicts of interest acknowledge that there are deals you cannot do."


Segarra isn't dumb and this is the concrete information that she knew would be hard to water down.  That's why she had to go.
 
2013-10-15 04:36:52 PM
The world will never be truly safe until Lloyd Blankfein is clubbed to death with the skull of Ted Cruz.
 
2013-10-15 04:37:57 PM
Sounds legit.
 
2013-10-15 05:04:15 PM
There is a technical term for these people.

"Friends of the Firm"

Learn it early.
 
2013-10-15 05:40:22 PM
A friend of ours is a Fed examiner.

The stories he tells probably pale to the ones he has to keep secret.  Some of the information he did tell involved known and respected people doing everything you could think of behind closed doors, but the Fed tries to protect their reputations as much as possible to help prop up the illusion of confidence in the system.  One small bank owner in particular was outright embezzling, but never went to jail for the sake of all the employees' jobs if word got out.
 
2013-10-15 06:08:07 PM
Today, on stories that make me all stabby ....

Ugh, i think the the most disheartening thing for me is that there's so many similar stories of corruption to this one, that I don't even really flinch anymore.

I don't see how anyone with a conscious that is half decent at that job could last more than a week.
 
2013-10-15 06:18:22 PM

TV's Vinnie: The world will never be truly safe until Lloyd Blankfein is clubbed to death with the skull of Ted Cruz.


yes its all ted's fault.  you're the master of observation and deduction.  Clearly you are a genius beyond my feeble comprehension of even the shallowest meaning of the word.

//I'd prefer chuck schumer's skull...but will settle for almost any one
 
2013-10-15 06:38:35 PM
The current president of the New York Fed, William Dudley, is a former Goldman partner. One of his New York Fed predecessors, E. Gerald Corrigan, is currently a top executive at Goldman. At the time of Segarra's firing, Stephen Friedman, a former chairman of the New York Fed, was head of the risk committee for Goldman's board of directors.
*                                                 *                                  *                            *
I detect a fundamental conflict of interest that needs to be addressed. 'Ovem lupo commitere'
 
2013-10-15 08:12:24 PM

JohnAnnArbor: [dilbert.com image 640x200]


The really, really sad part of that cartoon is that is exactly how it is done and was the core of the financial meltdown.
/fark moodys, finch, and s&p
 
2013-10-15 10:04:15 PM
Stealing money is a true art to be appreciated. It's not like stealing cheap german cheese.
 
2013-10-16 12:03:01 AM

fickenchucker: A friend of ours is a Fed examiner.

The stories he tells probably pale to the ones he has to keep secret.  Some of the information he did tell involved known and respected people doing everything you could think of behind closed doors, but the Fed tries to protect their reputations as much as possible to help prop up the illusion of confidence in the system.  One small bank owner in particular was outright embezzling, but never went to jail for the sake of all the employees' jobs if word got out.


Or the collapse of the oh-so-delicate financial system?
 
2013-10-16 04:43:44 AM
Fail tag too big?
 
2013-10-16 07:07:20 AM

Marcus Aurelius: Nemo's Brother: Marcus Aurelius: Why do you think investment banks are only prosecuted at state level?  The Fed officials need a sweet job some day, and actually doing their jobs and regulating Wall Street would interfere with that.  So they turn a blind eye, and after their stint at the Fed they get a nice cushy 7 figure position sharpening pencils.

Please. Do you know how many GS people are or were in Obama's staff? They own him. The feds will do nothing.

Well of COURSE they're in the White House.  We're talking about the Federal Reserve here.  Goldman Sachs has been planted firmly in the White House for decades.


I think the breathless glee with which he reports these "secrets" about "the Obama administration" that he just discovered is kind of cute, and pointing out that these things have been the case for decades is a little pedantic of you, Ms. Debbie Downer.
 
2013-10-16 08:04:29 AM

jso2897: Marcus Aurelius: Nemo's Brother: Marcus Aurelius: Why do you think investment banks are only prosecuted at state level?  The Fed officials need a sweet job some day, and actually doing their jobs and regulating Wall Street would interfere with that.  So they turn a blind eye, and after their stint at the Fed they get a nice cushy 7 figure position sharpening pencils.

Please. Do you know how many GS people are or were in Obama's staff? They own him. The feds will do nothing.

Well of COURSE they're in the White House.  We're talking about the Federal Reserve here.  Goldman Sachs has been planted firmly in the White House for decades.

I think the breathless glee with which he reports these "secrets" about "the Obama administration" that he just discovered is kind of cute, and pointing out that these things have been the case for decades is a little pedantic of you, Ms. Debbie Downer.


How about the part where right after the banks destroyed the entire economy, Obama decided to put a millionaire Wall Street defense attorney in charge of the Department of Justice? Not to mention stacking millionaire Wall Street defense attorneys into the other top slots at Justice.

he chose Eric Holder, a former Clinton Justice official who, after a career in government, joined the Washington office of Covington & Burling, a top-tier law firm with an elite white-collar defense unit. The move to Covington, and back to Justice, is an example of Washington's revolving-door ritual, which, for Holder, has been lucrative--he pulled in $2.1 million as a Covington partner in 2008, and $2.5 million (including deferred compensation) when he left the firm in 2009.

Putting a Covington partner--he spent nearly a decade at the firm--in charge of Justice may have sent a signal to the financial community, whose marquee names are Covington clients. Goldman Sachs, JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, and Deutsche Bank are among the institutions that pay for Covington's legal advice, some of it relating to matters before the Department of Justice.

Holder's was not the only face at Justice familiar to Covington clients. Lanny Breuer, who had co-chaired the white-collar defense unit at Covington with Holder, was chosen to head the criminal division at Obama's Justice. Two other Covington lawyers followed Holder into top positions, and Holder's principal deputy, James Cole, was recruited from Bryan Cave LLP, another white-shoe firm with A-list finance clients.


When you stack the top positions at Justice with millionaire Wall Street defense attorneys who will go back to those jobs after a short stint in Washington, how shocking is it that they refuse to prosecute their once and future clients for their crimes?

Then there also turned out to be some curious patterns between investigations into the banks actions and donations.

A Newsweek examination of campaign finance records shows that, in the weeks before and after last year's scathing Senate report, several Goldman executives and their families made large donations to Obama's Victory Fund and related entities, some of them maxing out at the highest individual donation allowed, $35,800, even though 2011 was an electoral off-year. Some of these executives were giving to Obama for the first time.

Yea. Seems legit.

Hell, the Obama administration refused to prosecute HSBC even after catching them laundering money for terrorist organizations multiple times.

That's not a downer. That's disgusting.
 
2013-10-16 02:32:52 PM
"Such concerns are treated seriously and investigated appropriately with a high degree of independence," he said. "Personnel decisions at the New York Fed are based exclusively on individual job performance and are subject to thorough review. We categorically reject any suggestions to the contrary."

How about 'bullshiat?' How about 'bullshiat', Sam?
 
2013-10-16 04:22:04 PM

BullBearMS: jso2897: Marcus Aurelius: Nemo's Brother: Marcus Aurelius: Why do you think investment banks are only prosecuted at state level?  The Fed officials need a sweet job some day, and actually doing their jobs and regulating Wall Street would interfere with that.  So they turn a blind eye, and after their stint at the Fed they get a nice cushy 7 figure position sharpening pencils.

Please. Do you know how many GS people are or were in Obama's staff? They own him. The feds will do nothing.

Well of COURSE they're in the White House.  We're talking about the Federal Reserve here.  Goldman Sachs has been planted firmly in the White House for decades.

I think the breathless glee with which he reports these "secrets" about "the Obama administration" that he just discovered is kind of cute, and pointing out that these things have been the case for decades is a little pedantic of you, Ms. Debbie Downer.

How about the part where right after the banks destroyed the entire economy, Obama decided to put a millionaire Wall Street defense attorney in charge of the Department of Justice? Not to mention stacking millionaire Wall Street defense attorneys into the other top slots at Justice.

he chose Eric Holder, a former Clinton Justice official who, after a career in government, joined the Washington office of Covington & Burling, a top-tier law firm with an elite white-collar defense unit. The move to Covington, and back to Justice, is an example of Washington's revolving-door ritual, which, for Holder, has been lucrative--he pulled in $2.1 million as a Covington partner in 2008, and $2.5 million (including deferred compensation) when he left the firm in 2009.

Putting a Covington partner--he spent nearly a decade at the firm--in charge of Justice may have sent a signal to the financial community, whose marquee names are Covington clients. Goldman Sachs, JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, and Deutsche Bank are among the institutions that pay for Covington's l ...


You spelled "business as usual" wrong.
 
2013-10-16 07:12:31 PM

SDRR: You spelled "business as usual" wrong.


We've always seen some desire to look the other way, but major fraud was prosecuted under both Bushes and Clinton.

Bush 1 saw nearly a thousand fraudulent Savings and Loan bankers land in prison, and the Savings and Loan shenanigans were only a tiny drop in the bucket compared to the recent rampant industry wide fraud.

The difference is that Bush ordered the regulators to go after the biggest frauds as a waring to others.

"There hasn't been any serious investigation of any of the large financial entities by the Justice Department, which includes the FBI," says William Black, an associate professor of economics and law at the University of Missouri, Kansas City, who, as a government regulator in the 1980s, helped clean up the S&L mess. Black, who is a Democrat, notes that the feds dealt with the S&L crisis with harsh justice, bringing more than a thousand prosecutions, and securing a 90 percent conviction rate.

The difference between the government's response to the two crises, Black says, is a matter of will, and priorities. "You need heads on the pike," he says. "The first President Bush's orders were to get the most prominent, nastiest frauds, and put their heads on pikes as a demonstration that there's a new sheriff in town."


What's changed is the outright refusal to even prosecute fraud even when it's on a massive scale.
 
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