Posted October 20, 2013
by Jerry Alatalo
For those who have tried to do what they can to expose the historic criminality on Wall Street, Carmen Segarra is, as they say in law enforcement circles, “a person of interest”. Not in the sense that she has come to be seen as a suspect in some sort of crime, but that her case is one that can help the citizens of America and the world learn how the Wall Street operators “operate”.
As the story of Ms. Segarra is relatively new and developing, so far I have not a great deal to say about it. However the most important aspect of her story has to do with regulation of the financial sector-or should I say the lack of regulation. Carmen Segarra was a bank examiner for the New York Federal Reserve and worked on compliance issues as they related to Dodd-Frank laws as well as other financial regulation rules according to laws passed by Congress.
Firstly, we find that in effect the Federal Reserve is a self-regulating institution. This situation is a major league problem for many people, including Bill Black, who was heavily involved in investigations of savings and loan banks in the mid-eighties, which led to hundreds of convictions of high-level managers, as opposed to zero convictions of those responsible for the 2008 financial crisis.
In the short video of Bill Black on The Real News, he comments on Ms. Segarra’s situation, as she discovered some problems at Goldman Sachs with regard to laws on conflict-of-interest specified in Dodd-Frank legislation. As a bank examiner in the area of government law compliance, she submitted a report that was in effect the truth-her honest observations. Evidently she was encouraged by her superiors to change her report, declined to falsify her findings, and was terminated very shortly afterwards.
Thus far details about what Ms. Segarra found at Goldman Sachs relate to problems of conflict-of-interest. One may surmise that she discovered information which proved sales of so-called toxic assets to customers, while being fully aware of the worthlessness of them-placing bets against the complex financial products while claiming to customers that they are “great investments”.
Ms. Segarra received training as a lawyer and filed a wrongful termination suit against the New York Branch of the Federal Reserve. She claims in effect that she was fired for doing her job. Since she filed her lawsuit the New York Fed has attempted to “seal” certain documents she has in her possession, including internal emails, as the Fed claims she was in the wrong for taking documents which are the property of her former employer. I have seen only one interview of Ms. Segarra on the Spanish TV channel Univision Noticias. Unfortunately at this point no English interviews of her are available.
It would seem that the story of Carmen Segarra is one that journalists say, “has legs”, and may become a very large story the likes of Bradley Manning and Edward Snowden. As her story unfolds and becomes learned about by the American people and men and women around the Earth, what is uncovered may lead to very significant levels of concern and demands for a variety of reforms. As deregulation is widely accepted as the major cause leading to fraud, corruption and impunity in the years leading up to 2008’s worldwide financial catastrophe, Carmen Segarra may soon become a household name.
(After posting this-Special thanks to Ian @ Ace News Services for providing the following link to an absolutely astounding article @ ProPublica regarding Carmen Segarra)
(Update September 28, 2014: The following link will take you to a radio broadcast about Carmen Segarra’s explosive “Secret Tapes” at This American Life.
To any readers who have thoughts to add surrounding the true importance of Carmen Segarra’s story, her situation, and her lawsuit against the Federal Reserve, please do not hesitate to share them in the comments section below.
- Federal Reserve Sued for Firing Examiner Trying to Expose Goldman Sachs (blacklistednews.com)
- NY Fed’s Fired Goldman Examiner Makes Weird Case (bloomberg.com)
- N.Y. Fed Moves to Seal Documents in Ex-Bank Examiner’s Suit (truthdig.com)
- Whistleblower Suit Confirms that the New York Fed is in the Goldman Protection Racket (nakedcapitalism.com)
- Bill Black, Carmen Segarra, and the Regulatory Failure That Is the Federal Reserve Bank of New York (firedoglake.com)
- Goldman “Whistleblower” Sues NY Fed For Wrongful Termination (zerohedge.com)