Ex-New York Fed Examiner’s Suit Over Goldman Dismissed

The Federal Reserve Bank of New York won dismissal of a lawsuit by a former bank examiner who claimed she was fired for refusing to change findings critical of Goldman Sachs Group Inc. (GS)

Carmen Segarra sued in October, saying she conducted an examination of Goldman Sachs’s legal and compliance divisions in late 2011 and early 2012 and found they lacked a firm-wide conflict of interest policy. She claimed she was fired in May 2012 after refusing to change her findings.

U.S. District Judge Ronnie Abrams in Manhattan dismissed the case today, ruling that Segarra failed to make a legally sufficient claim under the whistle-blower protections of the Federal Deposit Insurance Act. The provisions apply to a violation of a law or regulation, while Segarra claimed she was fired for reporting Goldman Sachs’s alleged failure to comply with a 2008 advisory letter by the Fed’s Board of Governors’ Division of Bank Supervision and Regulation, Abrams ruled.

“The law only protects those who adequately allege that they have suffered retaliation for providing information regarding a possible violation of a ‘law or regulation,’ as distinct from what the law treats as advisory guidance,” Abrams wrote. “Plaintiff has not done so here.”

The case is Segarra v. Federal Reserve Bank of New York, 13-cv-07173, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Bob Van Voris in federal court in Manhattan at rvanvoris@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Fred Strasser

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