Corruption, Business as Usual in the Financial Markets

Some times you notice something, and think, "I'm gonna have to post about it later," and by the time you do, the story has changed.

This is particularly true in corruption cases, where things move rather quickly.

Case in point, the corrupt, self dealing Chairman of the Federal Reserve Bank of New York, Stephen Friedman, who, "bought shares in Goldman Sachs in December, profiting to the tune of $1.7 million."

Ordinarily not a problem, since the Federal Reserve does not regulate investment banks, but for a little fact, that in September, the Federal Reserve allowed Goldman Sachs to become a bank holding company, and hence was regulated by the Federal Reserve, and most particularly was regulated by, you guessed it, the Federal Reserve Bank of New York.

But of course, as Yves Smith so eloquently notes, "A Conflict of Interest is Not a Conflict of Interest If It Involves Goldman," or as he said to the Wall Street Journal:

Last week, following questions from The Wall Street Journal, Mr. Friedman, 71 years old, disclosed he would step down from the New York Fed at year end. In an interview, he said he made the decision because the waiver letting him own Goldman stock and be a Goldman director expires at the end of the year. He added: "I see no conflict whatsoever in owning shares."

Except of course, as Ms. Smith notes, he bought shares in a company that he was regulating, and he did so before the waiver was approved.

This is insider trading, pure and simple.

Of course, today we see have justice, Wall Street style, as Mr Friedman has resigned, effectively immediately, from the NY Fed.

That's it. He gets to walk way and keep his money, there will almost certainly be no criminal investigation.

This is business as usual, and, yet again, all roads on corruption lead back to Goldman Sachs, the BCCI of Wall Street.

Taking these racketeers down them down must be a government priority.