The Federal Reserve Bank of New York has come under fire recently with the release of secret tapes supposedly of regulators planning to “go soft” on Goldman Sachs. Carmen Segarra, a former employee who was assigned to Goldman, claims in a lawsuit that she was under pressure by her superiors to overlook certain findings she made concerning the company. The Fed eventually fired her allegedly because she refused to comply and change the findings.
In the recordings, one supervisor tells Segarra that basically consumer laws do not apply to certain institutions. Michael Lewis, best-selling author of “Flash Boys: A Wall Street Revolt,” said after listening to the tapes that, “The Ray Rice video for the financial sector has arrived.”
Segarra’s lawsuit was dismissed for failing to connect her firing with the alleged Goldman disclosures. The suit is pending appeal. Nevertheless, the tapes may prompt a Congressional investigation into the matter. Sen. Elizabeth Warren (D-Mass.), a member of the Senate Banking Committee, stated, “When regulators care more about protecting big banks from accountability than they do about protecting the American people from risky and illegal behavior on Wall Street, it threatens our whole economy.” She further stated, “Congress must hold oversight hearings on the disturbing issues raised by today’s whistleblower report when it returns in November.”