It’s an extraordinary document. There is not space here to do it justice, but the gist is this: The Fed failed to regulate the banks because it did not encourage its employees to ask questions, to speak their minds or to point out problems.
.. In 2012, Goldman was rebuked by a Delaware judge for its behavior during a corporate acquisition. Goldman had advised one energy company, El Paso Corp., as it sold itself to another energy company, Kinder Morgan, in which Goldman actually owned a $4 billion stake, and a Goldman banker had a big personal investment. The incident forced the Fed to ask Goldman to see its conflict of interest policy. It turned out that Goldman had no conflict of interest policy — but when Segarra insisted on saying as much in her report, her bosses tried to get her to change her report. Under pressure, she finally agreed to change the language in her report, but she couldn’t resist telling her boss that she wouldn’t be changing her mind. Shortly after that encounter, she was fired.)
See How Citigroup Wrote a Bill So It Could Get a Bailout
Citigroup lobbyists drafted a bill to allow more risky dealings by taxpayer-backed banks and—what do you know?—the House financial services committee passed nearly identical legislation.
Citi’s move to expand the types of derivatives it can trade comes as banks have increasingly been shifting derivatives out of their investment banking divisions (which aren’t backed by FDIC insurance) and into taxpayer-backed entities. “The rule is needed more than ever,” says Mike Konczal, an expert on financial reform at the Roosevelt Institute. The financial services committee passed the Citi-written bill on a 53-to-6 vote; all the no votes came from Democrats
SEC: Industry Staff Hired by Cox
Consumer and investor advocates have also been disappointed. Critics see an ideological link between the staff hired by Mr. Cox and today’s agency.
“When the chair doesn’t have a strong policy background, she is extremely dependent on her staff,” said Barbara Roper, the director of investor protection at the Consumer Federation of America. “Is there anyone on the staff in a high position in leadership, a single person to point to who has reform credentials, who isn’t someone from the industry?”
Senate Report Criticizes Goldman and JPMorgan Over Their Roles in Commodities Market
The Senate’s Permanent Subcommittee on Investigations found that Goldman Sachs and JPMorgan Chase assumed a role of such significance in the commodities markets that it became possible for the banks to influence the prices that consumers pay while also securing inside information about the markets that could be used by the banks’ own traders.
.. The Senate subcommittee alleges that Goldman used unorthodox measures at its warehouses in Detroit that made it harder to get aluminum out of the warehouses and raised the prices paid by aluminum users such as auto makers and brewers.