By Elaine Magliaro
I have already written two posts about Carmen Segarra (The Case of the Secret Recordings: A Tale about Bank Examiner Carmen Segarra, the New York Fed, and Goldman Sachs and My Second Post about Former Bank Examiner Carmen Segarra Who Was Fired by the New York Fed for Doing Her Job), a former bank examiner who had been hired by the NY Fed 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. Just seven months after being hired, she was fired by the Fed. Segarra claims that she was fired because she refused to change her finding that Goldman Sachs “lacked an adequate company-wide policy to manage conflicts of interest…” when asked to do so by her superiors at the Fed.
After her firing, Segarra filed a wrongful termination suit. She sued the New York Fed and her bosses—claiming that “she was retaliated against for refusing to back down from a negative finding about Goldman Sachs.”
On Friday, Jake Bernstein of ProPublica announced that a U.S. Senate banking “subcommittee will hold a hearing Nov. 21 on issues of regulatory capture following stories by ProPublica and This American Life about secret recordings made by an examiner at the Federal Reserve Bank of New York.” He said that the subcommittee plans to “explore the case of fired examiner Carmen Segarra and whether the Federal Reserve Bank of New York is too soft on institutions it supervises.”
Sen. Tim Johnson, D-S.D., chairman of the Senate Committee on Banking, Housing and Urban Affairs and Sen. Sherrod Brown, D-Ohio, who chairs the panel’s Financial Institutions and Consumer Protection subcommittee, announced the hearing today.
Witnesses have not been named. In a statement, Johnson said the ProPublica and This American Life reports “are troubling because they raise new questions about regulators being captured by the financial institutions they regulate.”
In October, Senator Brown told ProPublica “that while he believes the New York Fed and other financial regulators have taken some steps to improve their supervision of Wall Street, Segarra’s recordings make clear that more oversight is needed.” Brown said, “It kind of emphasizes what we have thought all along, that the regulators are too cozy toward the industry they are meant to police.”
I wonder if anything will come of this Senate hearing???
Senate Hearing Set on Secret Recordings at N.Y. Fed (ProPublica)