The New York Federal Reserve was not content with just firing Carmen Segarra for taking on Goldman Sachs now they are trying to have her lawsuit sealed. The NY Fed’s justification for sealing the documents and parts of the complaint is the accusation that Segarra stole the documents she is using in her case. In other words, the Fed is continuing its long tradition of secrecy and opacity.
On Friday, the Fed asked for a protective order to seal documents in the case as well as parts of the complaint. In a letter to U.S. District Judge Ronnie Abrams, New York Fed counsel David Gross said the information should be removed from the public docket because it is “Confidential Supervisory Information,” including internal New York Fed emails and materials provided to the Fed by Goldman.
“These documents show that at the time (Segarra) left the employ of the New York Fed, she purloined property of the Board of Governors of the Federal Reserve System,” Gross wrote, citing Fed rules that prohibit disclosing supervisory information without prior approval of the Fed.
The complaint has been removed from PACER but is still available online.
The NY Fed, despite constantly using the power of the state to reward its friends (Wall Street) and punish its enemies (Main Street), claims it is exempt from the Freedom of Information Act (FOIA) because it is not a “public agency.” How convenient, when they want to help out their previous/future employers they have the power of law, but when they are asked to be transparent and ethical they claim the law doesn’t apply to them.
The New York Fed has historically been one of the most opaque financial regulators and maintains that it is not subject to the Freedom of Information Act because it is not a public agency. Under new powers granted to it by Congress, the Federal Reserve System carries responsibility for ensuring that the nation’s most complex financial institutions are not posing a systemic threat to the world economy.
Because of its location, the New York Fed supervises the majority of the so-called “Too- Big-to-Fail” banks. New York Fed officials acknowledge that the institution failed in its regulatory responsibilities in the lead-up to the financial crisis.
At this point the decision rests with U.S. District Judge Ronnie Abrams who has yet to rule on sealing the lawsuit and complaint. Hopefully Judge Abrams will side with transparency given that the NY Fed’s opacity and secrecy helped bring the country to its knees in 2008 from a financial crisis they helped create through exactly the kind of conduct Ms. Segarra is alleging in her lawsuit.