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Journalism in the Public Interest

Update: Congressional Reaction, Goldman Changes Conflicts Policy

Here are developments following our report about the New York Fed and Carmen Segarra’s secret recordings:

  • Sens. Elizabeth Warren, D-Mass., and Sherrod Brown, D-Ohio, called for Senate hearings to explore whether the New York Fed is too deferential to banks it supervises, according to reports in The Hill and Reuters.
  • Goldman Sachs is reportedly changing its conflict of interest policy to ban employees from trading in individual stocks or bonds in certain situations, according to Bloomberg and BuzzFeed. As we reported with This American Life (transcript), Segarra had been tasked at the New York Fed to investigate Goldman’s policies in 2011. At the time, Goldman faced conflict of interest accusations in a shareholder lawsuit over Kinder Morgan’s acquisition of the energy company El Paso. Goldman was advising both companies and held a large stake in El Paso. A Goldman banker who worked on the deal advising El Paso had a $340,000 personal stake in Kinder Morgan. The case settled, but a judge called Goldman’s handling of the conflict “inadequate.”
  • For more coverage, see ProPublica’s previous reporting on Segarra, the El Paso-Morgan deal and Goldman’s conflict of interest policies and predicaments.
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