Believers in the grand Goldman Sachs (GS) conspiracy to manipulate US policy and the financial markets will have to add this one to their list.
The Journal shines the spotlight on Stephen Friedman, chair of the NY Fed and a Goldman Sachs (GS) boardmember who, last December made a large purchase of Goldman shares at distressed prices. And since at that time Goldman had recently converted to bank holding company status — putting it under the NY Fed’s purview — the joint chair/board seats was against the rules (Friedman won a waiver after applying for one).
It certainly doesn’t look all that great, but in the end there’s not a whole lot to this story. There’s no allegation that Friedman did anything actually improper relating to Goldman or his responsibilities to the NY Federal Reserve. It mainly just looks bad.
Friedman’s December purchases of Goldman are now up big, to the tune of $2.7 million. The article spends a lot of time looking at the timing of the purchase. But really, all he did was make a big buy at a period of distress for the bank — a move that’s turned out well. There’s no indication that he had any special inside knowledge at either Goldman or the NY Fed that he was trading on.
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