NY Fed Fired Examiner Who Took on Goldman

by Jake Bernstein
ProPublica, Oct. 10, 2013

A version of this story was co-published with The Washington Post.

In the spring of 2012, a senior examiner with the Federal Reserve Bank of New York determined that Goldman Sachs had a problem.

Under a Fed mandate, the investment banking behemoth was expected to have a company-wide policy to address conflicts of interest in how its phalanxes of dealmakers handled clients. Although Goldman had a patchwork of policies, the examiner concluded that they fell short of the Fed’s requirements.

That finding by the examiner, Carmen Segarra, potentially had serious implications for Goldman, which was already under fire for advising clients on both sides of several multibillion-dollar deals and allegedly putting the bank’s own interests above those of its customers. It could have led to closer scrutiny of Goldman by regulators or changes to its business practices.

Before she could formalize her findings, Segarra said, the senior New York Fed official who oversees Goldman pressured her to change them. When she refused, Segarra said she was called to a meeting where her bosses told her they no longer trusted her judgment. Her phone was confiscated, and security officers marched her out of the Fed’s fortress-like building in lower Manhattan, just 7 months after being hired.

“They wanted me to falsify my findings,” Segarra said in a recent interview, “and when I wouldn’t, they fired me.” read more

So Who is Carmen Segarra? A Fed Whistleblower Q&A

by Jake Bernstein
ProPublica, Oct. 28, 2013

Former bank examiner Carmen Segarra vaulted into public consciousness earlier this month when she filed a wrongful termination lawsuit alleging that the Federal Reserve Bank of New York fired her after she refused to go soft on investment banking behemoth Goldman Sachs.

As ProPublica has reported, the Fed hired Segarra in late 2011 as part of a group of examiners brought on to monitor systemically important banks in the aftermath of the Dodd-Frank regulatory overhaul. The Fed wanted experts in key areas — such as operations, compliance and credit risk — to examine the “Too Big To Fail” financial institutions.

Segarra’s career path seemed to make her a perfect fit. Segarra, 41, was born in Indiana, raised mostly in Puerto Rico and graduated from Harvard. Her father, a doctor, encouraged a life-long love of learning. She is a polyglot, fluent in Spanish and French, conversant in German and Italian. Even in the midst of preparing her lawsuit, she continued with classes in Dutch, which she says is “totally messing up my German.”

After getting a master’s degree in French cultural studies at Columbia’s campus in Paris, she went on to law school at Cornell. She then spent 13 years working at different financial firms, including Citigroup and Société Générale. Outside of the office, she held leadership positions in the Hispanic National Bar Association. Hired by the Fed as a legal and compliance specialist, she was told to pay particular attention to how Goldman was complying with the Fed’s requirements on conflicts of interest. read more