Business

Former NY Fed Employee Releases Secret Goldman Sachs Tapes

The recordings reportedly contain 46 hours of meetings between Goldman Sachs and examiners.

Former NY Fed Employee Releases Secret Goldman Sachs Tapes
Getty Images / Chris Hondros
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It could be a bombshell in the financial industry — what at least one writer is calling "The Ray Rice video for the financial sector."

He's referring to 46 hours of meetings recorded by a New York Federal Reserve employee — recordings that purportedly show bank regulators going soft on banking giant Goldman Sachs. 

That's the same Goldman Sachs that was bailed out to the tune of billions of dollars during the financial crisis of 2008.

The recordings were made by then-New York Federal Reserve Examiner Carmen Segarra in 2012 — reportedly using a small recorder on a keychain. They were recently released to both a reporter for ProPublica and radio program This American Life.

Here's a taste from NPR: "We're looking at a transaction that's legal but shady."

According to NPR, that's another New York Fed employee referring to a proposed Goldman Sachs financial transaction.

By Segarra's accusations, her co-workers were too soft on those kinds of transactions and the banking industry in general — often deferring to their lead.

A writer for Bloomberg — the same one who made the Ray Rice reference we mentioned earlier — characterizes the relationship like this: "You sort of knew that the regulators were more or less controlled by the banks. Now you know."

Segarra has since been fired by the New York Fed — according to Business Insider because she pointed out issues with the Fed's oversight. Her wrongful-termination case is now on appeal after a judge side with the Fed.

A full story on the recordings is now available from This American Life.

This video includes images from Mike Norton / CC BY 2.0 and SEIU / CC BY NC SA 2.0.