How One Badass Woman Blew the Whistle on the Financial Industry
If you need a reminder of the power of one woman, look no further than Carmen Segarra, the brilliant lawyer who pushed back against her employers, and was allegedly penalized for it. But that didn’t stop her from sharing secret tapes with This American Life, revealing the shocking corruption in the financial industry, leading to a call for a federal investigation.
Here’s a little backstory: In 2009, just a year after the financial crisis threw the entire economic health of the United States into question, the Federal Reserve Bank of New York hired a Columbia University finance professor named David Beim to investigate the ways that the New York Fed had failed to avert the events that led up to the crisis. Beim found that the biggest obstacle that the New York Fed faced was itself: It had become too quick to appease the banks it was supposed to be overseeing. Beim urged the Fed to hire outside examiners who wouldn’t be cowed by the culture of the bank, and encourage them to speak up.
Segarra, an Ivy-League-educated lawyer who had more than 13 years of experience in the area, and was one of the expert examiners that the New York Fed hired in 2011. Segarra, by all accounts, is a bright, brilliant, kickass lady. She was born in Puerto Rico, speaks English, Spanish, French, German, Italian, and is working on learning Dutch. She has a law degree from Cornell and an undergraduate one from Harvard. She held leadership positions at the National Hispanic Bar Association. And she’s not a lady afraid of speaking her mind.
As a new, extensive report from ProPublica and This America Life reveals, Segarra was fired from her post examining Goldman Sachs after only seven months on the job. Why? In her lawsuit against the New York Fed, she says it’s because she wouldn’t back down from the negative assessment she had of the bank’s internal operations.
The most remarkable thing about Segarra’s story is that she had made a series of audio recordings of her time working under the New York Fed, documenting meetings with her bosses and other exchanges at the bank. Segarra clearly knew that the higher-ups were resistant to her efforts, and made the recordings to protect herself. ProPublica reports that Segarra began experiencing pushback within the first month she was working.
In total, Segarra recorded 46 hours during her time at Goldman Sachs, including several exchanges that eventually led to her firing. Including one tape of a meeting, in which Segarra attempts to persuade her boss that the bank needed a policy to adequately deal with potential conflicts of interest. Her boss refutes her, and the clash is clearly one that eventually contributed to Segarra’s firing.
The entire report is a fascinating look at the culture that Beim described, in which the regulators cannot properly manage banks. Segarra’s bravery in the face of that culture, and her determination to bring the inner operations of an institution like Goldman Sachs into the light is incredibly moving, important, and inspiring.