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According to the Collins English Dictionary 10th Edition fraud can be defined as: "deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage".[1] In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science, to gain prestige rather than immediate monetary gain
*As defined in Wikipedia

Monday, May 4, 2009

NY Fed Chairman to Step Down, Violated Fed Policy in Goldman Stake

Via WSJ, the NY Fed/Goldman Sachs relationship finally seeps out... at least a little bit. As much as I would love to sensationalize this story, there is a much larger picture that needs revealing. But this is certainly a start:

The Federal Reserve Bank of New York shaped Washington's response to the financial crisis late last year, which buoyed Goldman Sachs Group Inc. and other Wall Street firms. Goldman received speedy approval to become a bank holding company in September and a $10 billion capital injection soon after.

During that time, the New York Fed's chairman, Stephen Friedman, sat on Goldman's board and had a large holding in Goldman stock, which because of Goldman's new status as a bank holding company was a violation of Federal Reserve policy.

The New York Fed asked for a waiver, which, after about 2½ months, the Fed granted. While it was weighing the request, Mr. Friedman bought 37,000 more Goldman shares in December. They've since risen $1.7 million in value.

Using the argument that he does not actually decide Fed policy, Mr Friedman oversaw the search for a new NY Fed President after Tim Geithner's departure for the Treasury (we all know how that worked out), during which he found former Goldman alum William Dudley.

Read the full article - click here.


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