One who intends to leave others better off for his having existed.

5/21/14

If former New York Fed Chairman and Goldman Sach's alumni Stephen Friedman knew about secret loans to Goldman in 2008 and 2009, how did he not buy GS with unknown information?




"Stephen Friedman, a former director of Goldman Sachs,
was named Chairman of the Federal Reserve Bank of New York in January 2008.

Although he had retired from Goldman in 1994,
Friedman continued to own stock in the firm.

Goldman's conversion from a securities firm to a bank holding company in September 2008
meant it was now regulated by the Fed and not the SEC.

...Friedman was granted a temporary one-year waiver of a rule
that forbids "class C" directors of the Fed from direct interest with those it regulates.

Friedman agreed to remain on the board until the end of 2009
to provide continuity in the wake of the turmoil caused by Lehman Brothers' bankruptcy.

The Fed’s Secret Liquidity Lifelines to Goldman Sachs Group

...Media reports in May 2009 concerning Friedman's involvement with Goldman,
and in particular, his purchase of the firm's stock
when it traded at historical lows in the fourth quarter of 2008,
fueled controversy and criticism over what was seen as a conflict of interest
in Friedman's new role as supervisor and regulator to Goldman Sachs.

The Fed’s Secret Liquidity Lifelines to Goldman Sachs Group

These events prompted his resignation on May 7, 2009.

Although Friedman's purchases of Goldman stock
did not violate any Fed rule, statute, or policy,
he said that the Fed did not need this distraction.

He also stated his purchases, made while approval of a waiver was pending,
were motivated by a desire to demonstrate confidence in the company
during a time of market distress."

Wikipedia

Insider Trading



"Insider trading" is a term that most investors have heard
and usually associate with illegal conduct.



...Illegal insider trading refers generally to buying or selling a security,
in breach of a fiduciary duty or other relationship of trust and confidence,
while in possession of material, nonpublic information about the security.



...Examples of insider trading cases that have been brought by the SEC are cases against:



...Government employees who learned of such information
because of their employment by the government; and



Other persons who misappropriated, and took advantage of,
confidential information from their employers.



Because insider trading undermines investor confidence
in the fairness and integrity of the securities markets,
the SEC has treated the detection and prosecution of insider trading violations
as one of its enforcement priorities.



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