The Fed Versus Disclosure

http://www.futureofcapitalism.com/2010/01/the-fed-versus-disclosure

Bloomberg News has gotten hold of some emails between lawyers for the New York Fed and for AIG that depict the New York Federal Reserve, then headed by Timothy Geithner, who is now President Obama's Treasury Secretary, as trying to keep secret some of AIG's payments to counterparties, including Goldman Sachs. One lawyer for AIG wrote to a lawyer for the Fed that one filing ""reflects your client's desire that there be no mention of the synthetics in connection with this transaction...They will not be mentioned at all." The Bloomberg article quotes a Republican congressman who obtained the emails, Darrell Issa, as saying, "It appears that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information." The whole story shows what a swamp the government takeover of AIG was; in order to fulfill its disclosre obligations to one branch of the government, the Securities and Exchange Commission, the company needed to beg to permission of another branch of the government, the Federal Reserve Bank of New York. It all seems to have provided lots of work for lawyers, but it's hard to see how it provided much value to shareholders or taxpayers.

by Editor  |  Jan 7, 2010 at 9:31 am Related Topics:  AIG, Federal Reserve, Goldman Sachs, SEC, Timothy Geithner receive the latest by email: subscribe to the free futureofcapitalism.com mailing list