NY Fed Moves To Dismiss Suit Brought By Former Goldman Examiner
The New York Federal Reserve Bank filed a motion on Friday to dismiss a lawsuit brought by a former employee who claimed she was fired after refusing to alter a critical examination of Goldman Sachs Group Inc (GS.N).
The ex-employee, Carmen Segarra, said after examining Goldman’s legal and compliance divisions for seven months, she found the bank did not have policies to prevent conflicts of interest as required by regulation.
In a 30-page court document, lawyers for the New York Fed said some of Segarra’s claims were “implausible owing to numerous contradictions within her pleading.”
“Most glaringly, the allegation that Goldman Sachs did not have any conflict of interest policy is belied by plaintiff’s own exhibits, which show that the ‘nonexistent’ policies were, in fact, available on Goldman Sachs’s public website,” the document said.
Attorneys who filed the motion in federal court in the Southern District of New York and Segarra’s lawyer, Linda Stengle, did not immediately respond to a request for comment. A Goldman Sachs spokesperson declined to comment.
According to Segarra’s lawsuit, the New York Fed’s Legal Compliance and Risk team voted to downgrade Goldman’s annual rating pertaining to policies and procedures as a result of findings. She alleges that two New York Fed officials overseeing the Wall Street bank, Michael Silva and his deputy Michael Koh, were concerned a downgrade would hurt the Goldman’s business.
Both Koh and Silva are named as defendants in Segarra’s lawsuit, as well as her former supervisor, Johnathon Kim.
Segarra was assigned to Goldman’s legal and compliance divisions from October 2011 until May 2012, and looked into three controversial transactions related to Solyndra, Capmark and the merger of El Paso and Kinder Morgan Inc (KMI.N). At that point, Kim, Silva and Koh fired her and had her escorted from the building by security guards after weeks of disputes and pressure to change her examination findings, the lawsuit said.
The case is Segarra v. The Federal Reserve Bank of New York et al in the U.S. District Court for the Southern District Of New York, No. 1:13-cv-07173-RA
(Reporting by Mica Rosenberg; Editing by Lisa Shumaker)