Thursday, May 8, 2014

A Federal Judge with a Famous Father and Brother is Raising Eyebrows in Her Handling of a Sensitive Case Involving Goldman Sachs and the NY Fed

By Pam Martens

On October 10, 2013, bank examiner Carmen Segarra and her attorney, Linda Stengle of Boyertown, Pennsylvania, took on one of the mightiest and interconnected institutions on Wall Street: the Federal Reserve Bank of New York. They relied on the Federal court system, funded by the taxpayer, and a fair and impartial judge to level the playing field. Things got off to a promising start.
Segarra was a bank examiner at the Federal Reserve Bank of New York, a key regulator of Wall Street banks. She charged in her lawsuit that when she turned in a negative assessment of Goldman Sachs, she was bullied and intimidated by colleagues at the New York Fed to change her findings. When she refused, she was terminated from her job in retaliation and escorted from the Fed premises, according to her lawsuit.
The case was assigned to Judge Ronnie Abrams, an Obama appointee, the daughter of constitutional law expert, Floyd Abrams, and sister to Dan Abrams, the well known legal affairs commentator on television.
Segarra also had a powerful whistleblower protection law on her side, designed specifically to include a bank examiner such as herself working for a Federal agency overseeing banks. The law is known as the Federal Deposit Insurance Act and codified as 12 U.S.C. 1831j.  It was enacted to prevent the intimidation, discrimination or firing of employees involved in examining the safety and soundness of the U.S. financial system because they had found wrongdoing and reported it. A key section reads...


  1. JT out of BarrowMay 8, 2014 at 9:25 PM

    Goldman Sachs and the NY Fed ?
    Government Sachs IS the Fed.
    And Vice Versus.

  2. This is just another form of Quantitative Easing. Instead of easing credit for the big banks, they are easing the enforcement of laws.

  3. "Just Us" from the Blues

    The Blue Team dealt the public a trifecta of disturbing legal stories. The first was a shot across the bow of private equity underwriters (PEU's) at their Compliance soiree in New York. Despite securing information on widespread fee abuses, a SEC representative made sweet talk to the big money boys. This could be the latest round of egregious actions swept under the rug by the political team in power.

    Recall corporate chiefs backdating stock options on a widespread basis? Some 30% of options were backdated. This compares to 50% of PEU's doing untoward things with investor money and calling them "fees." I smell a build to 2016 election year tough talk, after which seemingly magical settlements are reached with PEU founders, letting them escape with kajillions.

    Next up in Blue "Just Us" comes the case of New York Fed whistleblower, fired for raising concerns about Goldman Sachs.

    The last involved the Treasury, FBI and Justice Department effectively looking the other way over abuses that led up to the financial crisis.

    So far, I’ve heard almost nothing about the ethics and professional responsibility of lawyers in what many Americans consider to be a complete breakdown in effective white-collar law enforcement against the most powerful in the wake of a devastating financial crisis.

    President Obama said they wouldn't go there and his team hasn't. This should set him and other Blue leaders up for high paying PEU advisory slots post "public service."