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The Latest Scandal: Goldman, Fed Employees Busted For Illegally Sharing Confidential Information
On the morning of Friday, September 26, in addition to the shocking news of Bill Gross' departure from Pimco, the world was just as shocked, or not as the case was for many, that a former NY Fed staffer, Carmen Segarra, who had been previously fired for suggesting that Goldman Sachs has an undue influence on the NY Fed and gets a preferential treatment (certainly as a result of NY Fed's president Bill Dudley being working previously at Goldman Sachs), had released nearly 50 hours of tapes confirming her allegations: that the NY Fed was nothing but a branch of the bank that controls every central bank. The full details were presented in "How Goldman Controls The New York Fed: 47.5 Hours Of "The Secret Goldman Sachs Tapes" Explain."
Ironically it was on that very day that another recent Goldman hire from the NY Fed - a classic case of, as the NY Times puts it, the "revolving door, the symbolic portal that connects financial regulators to Wall Street" - a 29-year-old former New York Fed regulator named Rohit Bansal, got into hot water after something "shocking" was revealed: he had an inside source at the NY Fed who was providing him with illegal, confidential information on a regular basis.
Here is William Dudley, formerly of Goldman Sachs and president
of the New York Fed, saying "I don’t think anyone should question
our motives." It may have been an order.
As Bloomberg notes, following the re-escalation of the Segarra scandal, Bansal was promptly fired. Of course, had Carmen not revealed to the world just how extensive Goldman's domination of the NY Fed is, as Bansal's action demonstrated, he would still be fed confidential information from the New York Fed itself.
The banker, who had joined the company in July from the New York Fed, was dismissed a week after the discovery in late September along with another employee who failed to escalate the issue, according to an internal memo obtained by Bloomberg News that didn’t identify the pair. Jake Siewert, a bank spokesman, confirmed the contents of the memo, which was prompted by a report in the New York Times yesterday.
“We have zero tolerance for improper handling of confidential information,” New York-based Goldman Sachs said in the memo. “We are reviewing our policies regarding any hiring from governmental institutions to ensure that they are appropriately effective and robust.”
Wrong: what Goldman has zero tolerance for is having its bankers getting caught, or its manipulative action exposed to the general public, as took place on September 26. Once that happens, one or two bankers are shown the door, while the law-breaking culture continues unabated.
According to the NY Times, which broke the story, this is what happened:
From his desk in Lower Manhattan, a banker at Goldman Sachs thumbed through confidential documents — courtesy of a source inside the United States government.
The banker came to Goldman through the so-called revolving door, the symbolic portal that connects financial regulators to Wall Street. He joined in July after spending seven years as a regulator at the Federal Reserve Bank of New York, the government’s front line in overseeing the financial industry. He received the confidential information, lawyers briefed on the matter suspect, from a former colleague who was still working at the New York Fed.
As a reminder, the NY Fed is also the world's biggest hegde fund, as it is the place where, at Liberty 33, the Fed's market moving operations are executed. It is also where the legendary PPT is located. Continuing:
The previously unreported leak, recounted in interviews with the lawyers briefed on the matter who spoke anonymously because the episode is not public, illustrates the blurred lines between Wall Street and the government — and the potential conflicts of interest that can result. When Goldman hired the former New York Fed regulator, who is 29, it assigned him to advise the same type of banks that he once policed. And the banker obtained confidential information, along with several publicly available facts, in the course of assignments from his bosses at Goldman, the lawyers said.
What exactly data was one current NY Fed staffer leaking to a former NY Fed staffer, currently working at Goldman?
The information provided Goldman a window into the New York Fed’s private insights, the lawyers said, including details about at least one of Goldman’s clients, a midsize bank regulated by the Fed. Although it is unclear how Goldman bankers used the information, if at all, the confidential details could have helped them advise the client.
Because if you are not a part of the club, Goldman will chew you up and spit you out, courtesy of confidential NY Fed information.
Naturally, "the emergence of the leak comes as questions mount about a perceived coziness between the New York Fed and Wall Street banks — Goldman in particular. Revelations from a former New York Fed employee, Carmen Segarra, recently stoked that debate. Ms. Segarra released taped conversations suggesting that her supervisors went soft on Goldman, specifically over a deal that one regulator called “legal, but shady.”"
What questions? Goldman controls the NY Fed, period, the end. For the NYT the conclusion is a little more roundabout: "The leak strikes at the heart of questions about the ability of the New York Fed — the public’s eyes and ears on Wall Street — to maintain its independence from the banks it regulates. It also comes as a popular image of Goldman as a bank that puts profit above all has begun to fade."
Which is precisely what Goldman wanted: keeping a low profile while changing absolutely nothing about its corrupt culture, a culture which is enabled by its very regulators who are captured courtesy of former Goldman employees being placed at strategic top posts. It really isn't rocket science.
And the biggest irony is that Bansal's illegal abuse of confidential NY Fed data only was noticed for the first time... when Carmen Segarra's allegations hit the public for the second time on September 26 as noted above:
At the request of his bosses, Mr. Bansal gathered information about how regulators might view various issues facing Goldman’s banking clients, the lawyers briefed on the matter said. Much of what Mr. Bansal learned, the lawyers said, was fair game.
But in an email to his supervisor, Joseph Jiampietro, Mr. Bansal shared some potentially confidential supervisory information about a Goldman banking client. Mr. Jiampietro — a managing director at Goldman who was once a senior adviser to Sheila Bair, the former F.D.I.C. head — has since told colleagues he had no idea the information was subject to regulatory restrictions.
“Mr. Jiampietro never knowingly or improperly reviewed or misused” confidential supervisory information, his lawyer, Adam Ford, said in a statement. “He should not have been terminated. Any compliance failings regarding Mr. Bansal had nothing to do with Mr. Jiampietro.”
It was not until the morning of Sept. 26 that Goldman executives objected to some of Mr. Bansal’s information, the lawyers briefed on the matter said. During a conference call with Mr. Jiampietro and two higher-ranking Goldman executives, Mr. Bansal circulated an email with a spreadsheet attached. The email apparently set off alarms within Goldman. Within hours, the bank opened an internal investigation and alerted the New York Fed.
Goldman determined that the spreadsheet contained confidential bank supervisory information. Federal and state rules classify certain records, including those generated during bank exams, as confidential. Unless the Federal Reserve provides special approval, it can be a federal crime to share them outside the Fed.
Of course, had the Segarra story not resurfaced, Bansal would still be at Goldman.
As for the leaker at the NY Fed, we know this: "Some of Mr. Bansal’s information, the lawyers said, may have come from Jason Gross, who worked at the New York Fed at the time."
This guy: a bank examiner, and formerly a controller at Deutsche Bank, a person interested in "pro-bono consulting." We already know Bansal is one of Gross' connections. Who are the other 10, and how soon until all his connections "unfriend" him?
It appears Gross is no longer at the NY Fed either: "Andrea Priest, a spokeswoman for the New York Fed, didn’t immediately respond to an e-mail seeking comment on the dismissed Goldman Sachs workers after normal business hours. The regulator also fired an employee it suspected of sharing information with the banker, the New York Times reported. In a statement to the paper, the New York Fed said it has “zero tolerance” for personnel who don’t safeguard confidential information."
What happens next? Tomorrow, Senator Sherrod Brown, an Ohio Democrat, has scheduled a hearing before his banking subcommittee on “regulatory capture” following Segarra’s claims.
There will be much posturing, and lots of angry words, because clearly Mr. Brown did not get enough financial support from the "Business Services" industry. After all he too would prefer millions more in bribes, pardon, lobby spending from Goldman et al.
Will anything change? Of course not. After all it is Goldman that runs the United States of America. Expect this latest scandal to be swept under the rug within days.
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I remember the same kind of thing happened back in the early 1980's, when Ted Langevin, who was a statistician with the FED doing M1-2 etal was hired by one of the big banks and got caught going back into the FED's computer base for raw data, because without it, he couldn't really do his job of forecasting. Well in those days, the bank didn't even get a chance to fire him, the Department of Justice was down on him like white on rice. I knew him because at the time, Ted was one of the people at the FED I would talk to on occasion when I was doing my weekly money supply report. The last I spoke with Ted, the AG had him stretched out on hot sand and was feeding him red ants. Just goes to show you how things have changed. Now the Dept of InJustice doesn't do shit, but GS does only because the guy got caught. What was the difference between Ted and Bansal??? Oh, about 40 years. electanewcongress.com; scienceofliberty.us; electfawell.com SERFS UP AMERICA!
its within the Fed charter to review the Reserve requirements of each of its charter banks on a case by case basis, (this is the stress test for want of another term) now you may consider that arrangement as the Charter banks sharing information with the Fed, but it's also the Fed sharing information about its policy decisions with the Charter banks. if the Fed is going to make a policy decision that will affect the Charters, then they should be the first to know, rather than getting blindsided by market reactions. this is basically the corporation and the franchise. what is illegal is the fed sharing information with the government, which destroys the illusion of an independent fed. that policy is consistently and criminally violated, such as Bernanke personally driving the forklift which loads the pallet of money on the airplane for delivery to some unauthorized recipient at the discretion of government officials. this is the dog barking at his owner while the thief crawls in the back window
The Fed and Goldman sharing information illegally????
Naw, just can't believe that. They all know that if the law found out heads would roll, bosses sent to jail etc. They wouldn't risk it.
Totally agree. Wanting us to believe it's all just one big criminally corrupt monopoly-money mutually masturbatory Ponzi scam is preposterous.
Tyler, you go too far Sir!
This story is packed with shit like this.
"We are reviewing our policies regarding any hiring from governmental institutions to ensure that they are appropriately effective and robust"
"Federal Reserve Bank of New York, the government’s front line in overseeing the financial industry."
"illustrates the blurred lines between Wall Street and the government — and the potential conflicts of interest that can result"
all to make it look like its . Gov
But when we want to see the books they clame privet bank.
Dbl standard scum bags
It will not let me correct the typo
Private
zeroprivet?
why bother with jail time? PROMOTIONS + BONUSES FOR EVERYONE!!!
Bong hits and blow! Ebola soaked whores all around!
Who owns the shares in the NY FED, and why can't we find out if it is issuing the public currency?
How can you "question motives" when you do God's work?
www.traderzoo.mobi
Holy fucking fuck already. Schemers and liars. Just get a fucking job and leave everyone alone. What is it, some kind of fucked up psychology? The deep seated need to be controlling people, to be seen as important, to be perceived as "at the center of everything?"
Just get a job and stop the lies and schemes!
i always assumed as much
Off topic.
No. THIS IS THE LATEST SCANDAL.
http://rt.com/news/207243-netherlands-mh17-investigation-documents/
Language is important. Words mean things. Use them right.
That's not a scandal.
That is a crime on a huge scale. Accessory, after the fact. Collusion.
Stop fucking agreeing to the term Scandal!
Name it correctly.
You're absolutely correct.
This is a war crime that Malaysia or Russia should bring before the ICC in the Hague, Netherlands.
Oh, wait...
"Goldman and Fed employees busted..." LOL Goldman employees work everywhere, including the Fed, and it would be extremely foolish at this point to think that there's any separation between them. Every "scandal," every "investigation," is just Kabuki theater with a laugh track.
Useless non productive leeches on both sides (government employees and Wall Street Financeers). If you are incapable of any value added productive work, what else can you expect?
No surprise here. Mock the French we do, but they sure had it right over 200 years ago. Today, we just mope and whine and type on ZH (gulp! me included)
The best turn around I can recall is exemplified by the movie "Andersonville", the GA civil war camp, where a group of union soldiers had organized to strip and terrorize the new prisoners as they entered the camp until one soldier fought back, and with the simple chant WHO ? WHO? WHO?( meaning who is going to join me and take back our dignity and quash these traitors from our own ranks?led a revolt and took out those SOBs.) Ultimately, those perps were tried , convicted and hung inside the prison.
http://www.youtube.com/watch?v=7FmUm6rS024
These people - all of them - know that this state of affairs is temporary and there will be a time in the future when this will no longer be possible. Whether because of shifting politics, pogroms or outright collapse, it just ain't going to last. The fact that they are acutely aware and sensitive to this accounts for their rapaciousness. That, and the fact that they are shitbags.
The squid is public enemy number one.
Only the TPTB are allowed to steal w impunity.All others risk ....
https://www.youtube.com/watch?v=PDA4lcw8k1g
The squid is public enemy number one.
It doesn't matter one bit whether they have an inside guy. Do they carry out all of their discussions and meetings in milspec SCIF rooms where cell phones aren't allowed? No, they don't. So you can bet they are being electronically surveilled.
Gold price crushed to deter support for Swiss initiative: report
"British fund manager Ben Davies says that gold prices’ most recent collapse is part of central bank efforts to discourage Swiss voters from supporting the gold initiative to be decided at referendum on November 30."
http://www.mining.com/gold-price-crushed-to-deter-support-for-swiss-initiative-report-87913/
Sadly, the scandals are so commonplace now that there is no shock and little reporting of it all. When the western world turned away from its Judeo-Christian foundations, it set the stage for a world with no rules, in which raw power is the only arbiter.
It's goes, it goes, it goes, http://youtu.be/Orlbo9WkZ2E
The problem isn't just that the banks control the Federal Reserve. It's that the banks are the Federal Reserve and are always trading on insider information. Therefore, the very structure of the Fed is one of a completely criminal organization.
There's a solution: Abolish the banks. After all, they serve only two useful purposes: check clearing and ATMs. And I'm sure a
neutral entity could be created to serve both purposes.
The continued existence of banks will only further destabilize the U.S. economy and lead to ever-greater levels of unemployment and misery.