Bloomberg News

N.Y. Fed Seeks Dismissal of Examiner’s Lawsuit Over Goldman (1)

November 14, 2013

The Federal Reserve Bank of New York asked a judge to dismiss a lawsuit filed by a former bank examiner who alleged she was fired for refusing to change findings about Goldman Sachs Group Inc. (GS:US)’s conflict of interest policy.

The New York Fed said in a filing today in Manhattan federal court that Carmen Segarra “flagrantly violated” the bank’s policies, federal regulations and federal criminal law by making confidential supervisory information public in her lawsuit and circulating it to the news media without permission from the Board of Governors of the Federal Reserve System.

The Fed also said Segarra can’t sue under the federal whistle-blower statute because her concerns about Goldman Sachs’s policy didn’t involve a violation of law or regulations. While she claimed Goldman lacked a firm-wide conflict-of-interest policy, Goldman’s policies were actually available and posted on its public website, the Fed said.

“The gravamen of the complaint is not a whistle-blower’s provision of information, but a non-actionable disagreement between a supervised employee and more senior colleagues over how to interpret a Federal Reserve policy,” lawyers for the Fed wrote.

The bank said it fired Segarra for cause and not because she identified a possible violation of law or regulation.

Segarra said in a lawsuit filed in October that she examined the legal and compliance divisions of Goldman Sachs in late 2011 and early 2012 and found that they lacked a policy that conformed with federal banking regulations. She alleges she was fired because she refused to withdraw her findings.

Goldman Sachs said then that it has a comprehensive approach to addressing conflicts through firmwide and divisional policies and infrastructure.

The case is Segarra v. Federal Reserve Bank of New York,13-cv-07173, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Christie Smythe in federal court in Brooklyn, New York at

csmythe1@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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