Barofsky says the question of whether the New York Fed engaged in a coverup will result in some sort of action.
“We’re either going to have criminal or civil charges against individuals or we’re going to have a report,” Barofsky says. “This is too important for us not to share our findings.”
He won’t say whether the investigation is targeting Geithner personally.
On January 27, Tim Geithner will testify before Congress on the AIG 100% payout scandal. Today the NY Fed was ordered to turn over documents to Congress. (see subpoena).
The New York Fed asked Habayeb to “stand down” from negotiating with counterparties, according to an Oct. 31, 2008, e-mail he wrote to AIG CFO David Herzog. Herzog replied that AIG should “get back with Goldman” about the change in plans.
Before the New York Fed took over the talks, AIG tried to persuade banks to accept so-called haircuts of as much as 40 cents on the dollar, according to people familiar with the matter.
Chris Bowers at Open Left had a post yesterday about a spokespersons response to this AIG-NY Fed email scandal. Chris rightfully points out the complete and utter disconnect between Wall Street-Washington DC mafia and what the rest of us are experiencing.
Timothy Geithner did what was he was President of Federal Reserve Bank of New York? Well according to this Bloomberg report the NY Fed, led by Mr. Geithner:
told American International Group Inc. to withhold details from the public about the bailed-out insurer’s payments to banks during the depths of the financial crisis, e-mails between the company and its regulator show.
AIG said in a draft of a regulatory filing that the insurer paid banks, which included Goldman Sachs Group Inc. and Societe Generale SA, 100 cents on the dollar for credit-default swaps they bought from the firm. The New York Fed crossed out the reference, according to the e-mails, and AIG excluded the language when the filing was made public on Dec. 24, 2008.
Make sure you are sitting down when you read this story and if you have high blood pressure that you take your medicine before reading it.
I tried to add something profound .....but you know ... this shit writes itself.
Stephen Friedman, the chairman of the New York Federal Reserve Board, abruptly resigned on Thursday, days after questions arose about his ties to Goldman Sachs.
Mr. Friedman was chairman of the New York Fed at the same time he was a member of Goldman’s board. He also had a substantial stake in the firm as the Fed was crafting a solution to keep Wall Street banks afloat. Denis M. Hughes, deputy chair of the board, will take over as the interim chairman, the New York Fed said in a statement. (Read Mr. Friedman’s letter after the jump.)
Because the New York Fed approved a request by Goldman to become a bank holding company, the chairman’s involvement in Goldman was a violation of Fed policy, The Wall Street Journal said in an article earlier this week.
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