October 10, 2013 – Today, Stengle Law filed a wrongful termination lawsuit on behalf of Carmen M. Segarra complaining of wrongful termination by the Federal Reserve Bank of New York. The lawsuit alleges FRBNY and individual defendants Michael Silva, Michael Koh, and Johnathon Kim obstructed Senior Bank Examiner Segarra’s attempts to examine and report on Goldman Sachs’s conflict of interest practices. Segarra’s examination concluded Goldman failed to adhere to federal rules requiring a firmwide conflict of interest program.
Among other types of misconduct, the Complaint alleges FRBNY employees cornered Bank Examiner Segarra in an office and tried to force her to change her bank examination findings. Segarra refused and was fired three business days later.
FRBNY launched the examination into Goldman’s conflict of interest practices after news reports and lawsuits surfaced in 2011 about Goldman’s questionable business practices in three transactions – Solyndra, Capmark, and El Paso/Kinder Morgan. FRBNY assigned Senior Bank Examiner Segarra to examine each of these transactions and Goldman’s adherence to the Federal Reserve’s rules on conflict of interest programs.
Senior Bank Examiner Segarra conducted her examination in accordance with SR 08-08, a Federal Reserve Supervision and Regulation document. Goldman’s noncompliance with the SR 08-08 was obvious early in the examination. At a meeting on December 8, 2011, for example, Goldman Sachs told bank examiners that it had no firmwide conflict of interest program in place as of November 1, 2011. Goldman provided several documents to FRBNY that also showed it had no firmwide conflict of interest program. Nevertheless, FRNBY employees did not want Segarra to report Goldman’s noncompliance. When she refused to change the findings of her examination, FRBNY retaliated against Ms. Segarra and fired her.
“The law expects bank examiners will be allowed to examine big banks without fear of reprisal,” said Stengle, attorney for Carmen Segarra.
Plaintiff Carmen M. Segarra, Esq. attended Harvard, Columbia, and Cornell University law school and is an attorney who works in banking. The wrongful termination complaint was filed in the United States District Court for the Southern District of New York.
Stengle Law is a small law firm devoted to providing strong advocacy for whistleblowers reporting misconduct and financial fraud against the government.
Attorney Linda J. Stengle represents Ms. Segarra and can be reached for comment and information by calling 610-367-1604.