Daily Archives: October 26, 2015

Wall Street Shocked As Feds Bring Criminal Case Against Goldman Banker Over Fed Leaks


As we previously detailed, this is what happened in July 2014:

From his desk in Lower Manhattan, a banker at Goldman Sachs thumbed through confidential documents — courtesy of a source inside the United States government.

The banker came to Goldman through the so-called revolving door, the symbolic portal that connects financial regulators to Wall Street. He joined in July after spending seven years as a regulator at the Federal Reserve Bank of New York, the government’s front line in overseeing the financial industry. He received the confidential information, lawyers briefed on the matter suspect, from a former colleague who was still working at the New York Fed.

As a reminder, the NY Fed is also the world’s biggest hegde fund, as it is the place where, at Liberty 33, the Fed’s market moving operations are executed. It is also where the legendary PPT is located. Continuing:

The previously unreported leak, recounted in interviews with the lawyers briefed on the matter who spoke anonymously because the episode is not public, illustrates the blurred lines between Wall Street and the government — and the potential conflicts of interest that can result. When Goldman hired the former New York Fed regulator, who is 29, it assigned him to advise the same type of banks that he once policed. And the banker obtained confidential information, along with several publicly available facts, in the course of assignments from his bosses at Goldman, the lawyers said.

And now, a year after Carmen Segarra’s whistleblowing over The New York Fed’s regulatory capture by Goldman Sachs – amid 47.5 hours of secretly recorded tapes, a rare criminal action on Wall Street appears imminent, as The New York Times reports, against a former Goldman Sachs banker suspected of taking confidential documents from a source inside the government…

The banker and his source, who at the time of the leak was an employee at the Federal Reserve Bank of New York, one of Goldman’s regulators, might plead guilty to misdemeanor theft charges rather than fight the case at trial,according to lawyers briefed on the matter who were not authorized to discuss private deliberations. The men, who were both fired in the wake of the leak, wouldface up to a year in prison if they accept the plea deals.

In a statement, a Goldman spokesman emphasized that the banker worked for the firm for less than three months, and that the bank “immediately began an investigation and notified the appropriate regulators” once it detected the leak. Nonetheless, the bank is expected to pay a significant price for the leak.

Under a tentative deal with New York State’s financial regulator, the lawyers said, Goldman would pay a fine of $50 million and face new restrictions on how it handled delicate regulatory information. The settlement would also force Goldman to take the rare step of acknowledging that it failed to adequately supervise the former banker – thrusting the bank back into the spotlight just as it was shedding a popular image as a firm willing to cut corners to turn a profit.

Ex-Rabobank Traders Lose Midtrial Bid To Toss Libor Case

Law360, New York (October 26, 2015, 12:02 PM ET) — A New York federal judge on Monday refused to dismiss criminal charges against two former Rabobank traders over an alleged scheme to manipulate the London Interbank Offered Rate, all but assuring that the first U.S. trial stemming from a global market-rigging investigation will go to a jury.

Former Rabobank trader Anthony Allen, seen exiting federal court Oct. 13, and fellow ex-trader Anthony Conti have been accused of participating in a scheme to manipulate the Libor in order to benefit their trading positions. (Credit: Getty) U.S. District…