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"Above The Law" Fed Subpoena'd By Hensarling Over 2012 Leak "To The Priveleged Few"

Tyler Durden's picture




 

Having missed the deadlines and ignored demands for details surrounding the leak of the 2012 FOMC Minutes to an outside newsletter writer, The "above the law" Fed is now facing more problems:

  • *HENSARLING SUBPEONAS FED FOR DOCUMENTS ON 2012 LEAK
  • *HENSARLING SAYS FED HAS RESISTED COMMITTEE OVERSIGHT

An immovable object just met an unstoppable faorce. Perhaps this means we get to see the list of names who had contact with Medley Global Advisors (that The Fed said they would hand over only in the case of secrecy).

“The Federal Reserve has acted in a manner that can only be characterized as resistant to accountablilty and oversight,”

 

“It is unacceptable, illegal and corrupt for anyone at the Fed to deliver inside information that could provide a financial advantage to the privileged few and lead to the manipulation of financial markets”: Hensarling

*  *  *

As a reminder, ProPublica explains the leak...

The Federal Reserve sprung a previously unreported leak in October 2012, when potentially market-moving information about highly confidential monetary deliberations made its way into a financial analyst's private newsletter.

 

The leak occurred the day before the scheduled public release of meeting minutes that shed new light on the Fed's decision to embark on a third round of bond buying to boost the economy, ProPublica has learned.

 

...

 

The newsletter containing the leaked material came from an economic policy intelligence firm called Medley Global Advisors whose clients include hedge funds, institutional investors and asset managers. On Oct. 3, 2012, Regina Schleiger, an analyst with the firm, sent clients a "special report" titled "Fed: December Bound."

 

The report focused on the Sept. 12-13 open market committee meeting, where the panel had approved what's called "QE3," a new program of large-scale purchases of mortgage-backed and Treasury securities.

 

Typically, the Fed chairman holds a news conference following the meetings to help explain the committee's actions. But when Bernanke did this on Sept. 13, he did not reveal the depth of disagreement within the committee about how effective the bond-buying program would be and whether it was worth the cost.

 

Schleiger wrote, however, that the minutes due out the next day would reveal "intense debate between Federal Open Market Committee participants."

 

Schleiger also revealed that the Fed would likely continue buying longer-term Treasury bonds beyond December. As part of a program dubbed Operation Twist, the Fed had been selling short-term Treasuries to buy longer-term ones.

 

Schleiger wrote that the committee would likely continue buying long-term bonds even after it sold all the shorter-term Treasuries. This information was not contained in the minutes and proved to be accurate.

 

Her newsletter also explained in uncommon detail both how Fed staff constructed the minutes and various policy options that were recommended and the thinking of the leadership – Bernanke and vice chairs Janet Yellen and Bill Dudley.

 

"It's not unusual for board staff to pull all-nighters working on the final draft of the policy recommendations, once these has [sic] been commented on," Schleiger wrote. "This one took until after midnight."

Which resulted in an internal probe ordered by Bernanke that inevitably found no wrongdoing.. and so Congress took up the matter.

And then, as The Wall Street Journal reports, The Fed has ignored that request...

The Federal Reserve has not replied to a lawmakers’ request that it identify the individuals who had contact with a private consulting firm that published a report on the central bank’s market-sensitive internal policy deliberations.

 

In October 2012, the day before the Fed released its minutes of its September 2012 policy meeting, Medley Global Advisors, sent a report to its clients with several sensitive details that subsequently appeared in the minutes. A central bank probe found  a “few” Fed staffers had contact with Medley before the report, but did not identify them.

 

Rep. Jeb Hensarling (R., Texas), Chairman of the House Financial Services Committee, sent a letter to Fed Chairwoman Janet Yellen on April 15 asking the Fed to name them by 5 p.m. EDT April 22.

 

The deadline passed without any response by the Fed, a committee spokesman said Wednesday.

 

The Fed declined to comment. Medley did not respond to a request for comment.

*  *  *

Then Janet Yellen herself admitted meeting with Medley Global Advisors...

So she met with the analyst that leaked the statement... but didn't say anything?

 

And so then The Fed agrees to name the leaker (but only in secrecy)

As The Wall Street Journal reports,

The Federal Reserve is providing a congressional panel with the names of its staffers who had contact with a consulting firm that published details of market-sensitive policy deliberations in October 2012, “with the understanding that the names will be kept confidential,” Fed Chairwoman Janet Yellen said.

 

“As you are aware, the [Fed] Board’s Inspector General and the Department of Justice are in the midst of an investigation into this matter,” Ms. Yellen wrote in a letter dated Monday to Rep. Jeb Hensarling (R., Texas), chairman of the House Financial Services Committee, and Rep. Sean Duffy (R., Wis.), who chairs the panel’s oversight subcommittee.

 

We are cooperating fully with them and look forward to the results of their investigation. To avoid compromising that investigation, these names are being provided with the expectation that they will be kept confidential.”

 

Mr. Hensarling did not respond immediately Monday to a request for comment.

So we'll happily tell you who leaked it... as long as you don't tell the public.

Audit The Fed!!!

*  *  *

And so now, Hensarling is subpoenaing them...

The subpoena is necessary because the Fed has failed to comply with a request for documents, Hensarling, a Texas Republican, said in a statment Thursday.

 

 

 

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Thu, 05/21/2015 - 17:16 | 6119084 pods
pods's picture

Another yappy dog for Hannity to masterbate over. 

pods

Thu, 05/21/2015 - 17:38 | 6119123 AIIB
AIIB's picture

It's a good thing no jews have anything to do with THE FED... Otherwise, this might be a SCANDAL!

<-- you people crack me up

Thu, 05/21/2015 - 17:41 | 6119151 negative rates
negative rates's picture

Something looks squirrely here to me.

Thu, 05/21/2015 - 17:55 | 6119201 espirit
espirit's picture

Little too late.

Fuck the Fed.

Thu, 05/21/2015 - 19:36 | 6119462 Squid-puppets a...
Squid-puppets a-go-go's picture

someone tell hensarling to stay away from grassy knolls

Thu, 05/21/2015 - 21:14 | 6119712 MonetaryApostate
MonetaryApostate's picture

Something tells me the pitchforks, I mean Chinese/Indian/Russian AK-47s are about to come out....

Fri, 05/22/2015 - 14:57 | 6122442 TheReplacement
TheReplacement's picture

And bathtubs, and Mercedes, and small planes, and rooftops, and windows, and nailguns, and federal buildings containing sensitive investigations/papers, and theaters, and shotguns wielded by old bald guys, and schools, and marathons, and anywhere water, land, or air are found.

He's a deadman.

Wonder if they are running a line on him in Vegas.

Thu, 05/21/2015 - 17:56 | 6119205 max2205
max2205's picture

A waste of time 

 

Just ask Hitlery 

Thu, 05/21/2015 - 18:16 | 6119265 The Proletariat
The Proletariat's picture

Fuck You Mr. Yellen!

Thu, 05/21/2015 - 17:32 | 6119126 WillyWonka
WillyWonka's picture

...keep in mind here, pods, that Texas is home to some guy named Ron Paul...would you consider him a lap yappy dog?

Thu, 05/21/2015 - 18:59 | 6119372 BullyBearish
BullyBearish's picture

F^&*ing Bankers...

Thu, 05/21/2015 - 17:18 | 6119088 litemine
litemine's picture

The Tail Wagging The Dog.       

The Fed......a Private Unelected entity telling those who's money they control the Hows and Whens they will not follow any Rules.

End the Fed.        Charges must be Laid and the moneies returned to those who were hurt.

Fri, 05/22/2015 - 14:59 | 6122445 TheReplacement
TheReplacement's picture

There is no money involved.  It's all fraudulent paper promises.  The best thing to do is the simply abolish the Fed, kill the bankers, and completely abandon the FRNs completely - no value to anyone and any debts in FRNs no longer exist. 

Thu, 05/21/2015 - 17:22 | 6119097 q99x2
q99x2's picture

HENSARLING is doomed.

Thu, 05/21/2015 - 17:27 | 6119117 83_vf_1100_c
83_vf_1100_c's picture

'nother nailgun sicide coming up? Or, it's a dog-n-pony show or he's running for re-election or he has a book coming out or...

Thu, 05/21/2015 - 18:13 | 6119255 PhilofOz
PhilofOz's picture

I was thinking another unexplainable plane crash. 

Thu, 05/21/2015 - 17:44 | 6119160 messystateofaffairs
messystateofaffairs's picture

How dare Hensarling mess with the tribes favorite insider watering hole. They're going to call out the wetworkers on this one, look for it.

Thu, 05/21/2015 - 18:47 | 6119344 Turin Turambar
Turin Turambar's picture

LOL. It only took Hensarling 3 years. Yeah, he's all over this! SMH

Thu, 05/21/2015 - 19:34 | 6119457 optimator
optimator's picture

they'll just wait out the statue of limitations.

Thu, 05/21/2015 - 21:50 | 6119817 False Capital
False Capital's picture

Or find a dark-skinned individual to blame it on.

Thu, 05/21/2015 - 18:25 | 6119299 Berspankme
Berspankme's picture

Wonder how many calls from the tribe to Hensarling reminding him of campaign contributions.?

Thu, 05/21/2015 - 17:23 | 6119101 mtndds
mtndds's picture

Good luck with it.  This shit will be dragged out foreva!

Thu, 05/21/2015 - 17:28 | 6119115 mt paul
mt paul's picture

damn

 

 spam filter must have junked

my heads up email from the Fed...

Thu, 05/21/2015 - 17:35 | 6119136 kchrisc
kchrisc's picture

No honor amongst thieves.

Liberty is a demand. Tyranny is submission.

Thu, 05/21/2015 - 17:40 | 6119148 economessed
economessed's picture

If we have enough evidence, then let's stop with the sternly-worded letters, and start hanging people.  You want to change behavior?  Show that there are consequences.  I guarantee that a lifetime liar will deliver plenty of truth when they feel that itchy braided hemp rope wrapped around their neck.

 

They've decided that they don't have to abide by our laws, so we should feel free to return the favor. 

Thu, 05/21/2015 - 17:58 | 6119208 Ban KKiller
Ban KKiller's picture

FBI trollled you yet?

Thu, 05/21/2015 - 18:17 | 6119268 economessed
economessed's picture

No, but I will admit to having watched a lot of old westerns lately.  It was all so simple back then -- gold was money, nobody got any for free, you satisfied your social needs by going to the bar and getting drunk (on whiskey), and large ornery crowds would form to deliver justice to those that had done you wrong. 

Thu, 05/21/2015 - 18:02 | 6119220 espirit
espirit's picture

 I know this may sound callous to some,

but I prefer to cut off the little finger with a pair lopping shears before I ask any serious questions. 

Thu, 05/21/2015 - 17:54 | 6119163 exartizo
exartizo's picture

Dear Mr. Hensarling:

 

Please confirm that you don't own a nail gun sir.

 

Sincerely,

 

A Concerned ZH Reader.

Thu, 05/21/2015 - 17:45 | 6119165 richiebaby
richiebaby's picture

While eating a ham sandwich at a Texas restaurant, Hensarling will be killed by getting caught in the crossfire between biker gangs and police 

Thu, 05/21/2015 - 18:11 | 6119189 exartizo
exartizo's picture

Dear Mr. Hensarling:

 

SUGGESTION:

 

Perhaps we could skip the subpoena and go right for the jugular?

 

As in, presenting real credible legislation to Abolish The Fed.

 

The benefits would be real and tangible. In addition to taxpayer savings on bloated Fed salaries to the likes of Mr. Yellen, the resulting real, honest market correction would certainly be a step in the right direction in terms of healing the massive asset distortions the Fed has caused since 2009 in virtually every asset class.

 

Sincerely,

 

A Concerned ZH Reader.

Thu, 05/21/2015 - 17:54 | 6119197 mt paul
mt paul's picture

While eating a ham sandwich at a Texas restaurant, Hensarling will be killed by getting caught in the crossfire between pig farmers and Kosher butchers...

Thu, 05/21/2015 - 17:54 | 6119198 NotApplicable
NotApplicable's picture

Label this the "Hensnarling Certainty Principle."

Thu, 05/21/2015 - 17:56 | 6119206 Ban KKiller
Ban KKiller's picture

Just like crooked foreclosure cases put on by the banks. They HATE discovery and the production of business records as that would reveal the forgery and fraud. 

Can not show you the books...they are still simmering on the stove. 

Thu, 05/21/2015 - 17:59 | 6119213 two hoots
two hoots's picture

Another demonstation of a powerless, corrupt Congress.  How about a search warrant if something was illegal?  Go get it, tonight.  And if not, don't claim you represent me.

Thu, 05/21/2015 - 18:00 | 6119217 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

Clearly an issue of National Security </sarc> -- case closed!

Thu, 05/21/2015 - 18:01 | 6119225 Chippewa Partners
Chippewa Partners's picture

Hensarling Nail Gunned.

Just like that it's over.

Almost predictable.

 

 

Thu, 05/21/2015 - 18:22 | 6119264 UndergroundPost
UndergroundPost's picture

55,000 pages coming that are Fed related - especially the ones that show how the Fed saved America (and the universe) - but please don't ask for the personal notes, emails and super secret pages that discuss yoga & the Fed's private stash of Quantitative Porn (QP)... those were deleted/burned/shredded/used as toilet paper. WHAT DIFFERENCE AT THIS POINT DOES IT MAKE ANYWAY??

Thu, 05/21/2015 - 18:19 | 6119278 Atomizer
Atomizer's picture

Does anyone remember when Greenspan was about speak? Thank goodness the media uses a 20 second media buffer. 

/winks 

Thu, 05/21/2015 - 18:20 | 6119283 DelusionalGrandeur
DelusionalGrandeur's picture

Fucking the fed, fuck congress fuck the doj, fuck every tbtf for fucking the 99% to hell and back. Why should anyone have to follow to God damn rule of law when those beholden to the public take every chance they get to skirt the rule of law....Oh and fuck you too Obama and your God damn Twitter account.

Thu, 05/21/2015 - 18:24 | 6119292 Berspankme
Berspankme's picture

+100000000000000

Thu, 05/21/2015 - 22:12 | 6119284 nakki
nakki's picture

Wait a minute can't congress trade on inside information. I don't know shit about Hensarling but it seems more political than anything else. Hey dude start with Congress and go on from there. Probably just pissed nobody told him "Blue horseshoe loves Endicott steal."

Thu, 05/21/2015 - 18:31 | 6119308 CHC
CHC's picture

How come we haven't heard of any more banker suicides?  Guess all the holes have been filled.  LOL

Thu, 05/21/2015 - 18:35 | 6119319 yellowsub
yellowsub's picture

How about providing the funding too?

Thu, 05/21/2015 - 18:38 | 6119329 Soul Glow
Soul Glow's picture

Timmy was calling GS and JPM in the Spring of '09 like a boy calling his schoolgirl crushes, hence ALL THE TIME.  How about we subpoena him?

Thu, 05/21/2015 - 18:48 | 6119350 Fun Facts
Fun Facts's picture

"It is unacceptable, illegal and corrupt...."

description of the Federal Reserve Corporation.

Thu, 05/21/2015 - 18:50 | 6119354 Joebloinvestor
Joebloinvestor's picture

Since no one goes to jail for banking shit, the speculation should be how much the phony fine will be.

Thu, 05/21/2015 - 19:29 | 6119444 optimator
optimator's picture

Suspicious release to him the day before the offical release three months after the FED meeting?  Somethings wrong here, a real insider gets it the day after the meeting!

Thu, 05/21/2015 - 19:31 | 6119448 fremannx
fremannx's picture

The Fed won't be around when the dust settles from the global economic collapse about to take place. It's incompetence and outright lies are catching up with it.

http://www.globaldeflationnews.com/the-creature-from-jekyll-island-the-e...

Thu, 05/21/2015 - 19:44 | 6119479 Barry McBear
Barry McBear's picture

This crap has been going on for a long time.  I talked to Medley maybe a decade ago, the salesperson boasted of the contacts they have in the federal reserve.  He didnt name names, but made it very clear they wine and dine insiders at the fed to obtain actionable information to trade off of.  I was surprised how forthright he was, but I guess he was trying to bag a sale.  I had no intention of paying the six figure subscription fee, but was trying to get a free trial, no dice.

Thu, 05/21/2015 - 20:16 | 6119550 Bogdog
Bogdog's picture

Right on their website:

http://www.medleyadvisors.com/services.html

Medley Global Advisors delivers accurate, unbiased intelligece on macroeconomic and political events by cultivating relationships with senior policymakers around the globe. Our network includes central banks, finance ministries, regulatory and intelligence agencies, and international finance and trade organizations. 

Nice!

Thu, 05/21/2015 - 19:49 | 6119489 are we there yet
are we there yet's picture

So the FED fraternity is on double super secret probation. aka animal house.

Thu, 05/21/2015 - 20:09 | 6119534 Bogdog
Bogdog's picture

We all pour haterade on the Fed. Well deserved.

But the alternative is giving the power of the Fed to Congress?

Probably a good idea as they've been such good stewards of the public trust and are always held accountable for their actions.

 

 

 

 

 

tee-hee

Thu, 05/21/2015 - 20:30 | 6119594 TeethVillage88s
TeethVillage88s's picture

Hensarling might be the one who was giving Yellen Hell at her recent testimony before Congress a month or so ago.

ZH had the video or live feed going for 2 days. I think it was the 2nd Day.

Probably like 1 hour or 1 1/2 hours in.

Thu, 05/21/2015 - 20:38 | 6119606 Fix It Again Timmy
Fix It Again Timmy's picture

This is worth a chuckle or two.  When the system operates under a "anything goes, BUT nobody goes to jail" policy, to expect any reform is seriously comedic...

Thu, 05/21/2015 - 21:46 | 6119805 False Capital
False Capital's picture

Too bad Hensarling has done nothing about Ben "We're not going to monetize the debt" Bernanke lying to his face back in 2009.

Thu, 05/21/2015 - 22:29 | 6119928 tarabel
tarabel's picture

 

 

I congratulate Mr. Hensarling and Senator Paul on their efforts to truly represent the interests of their constituents and to uphold their oaths of office in the face of, no doubt, relentless pressure, persecution, and threat.

Thu, 05/21/2015 - 23:07 | 6120018 VW Nerd
VW Nerd's picture

I think some would be inclined to put Janet and her other board member in jail for obstruction until someone starts naming names.

Fri, 05/22/2015 - 11:39 | 6121664 gcjohns1971
gcjohns1971's picture

Surely you jest.

 

If there was a desire for a level financial and monetary playing field there would be no Fed at all.

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